{ "id": 8358145, "name": "CAROL HAYNES McLEAN (FISK) v. RUSSELL L. McLEAN, III", "name_abbreviation": "McLean v. McLean", "decision_date": "1987-12-29", "docket_number": "No. 8728DC574", "first_page": "285", "last_page": "297", "citations": [ { "type": "official", "cite": "88 N.C. App. 285" } ], "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": "355 S.E. 2d 519", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1987, "pin_cites": [ { "page": "523" } ], "opinion_index": 0 }, { "cite": "85 N.C. App. 484", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12170056 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc-app/85/0484-01" ] }, { "cite": "324 S.E. 2d 829", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "312 N.C. 770", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4755941 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/312/0770-01" ] }, { "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": 2, "year": 1985, "pin_cites": [ { "page": "270" } ], "opinion_index": 0 }, { "cite": "75 N.C. App. 414", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526019 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc-app/75/0414-01" ] }, { "cite": "338 S.E. 2d 815", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "816" } ], "opinion_index": 0 }, { "cite": "79 N.C. App. 170", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8519808 ], "year": 1986, "pin_cites": [ { "page": "172" } ], "opinion_index": 0, "case_paths": [ "/nc-app/79/0170-01" ] }, { "cite": "344 S.E. 2d 100", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "81 N.C. App. 159", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522057 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc-app/81/0159-01" ] }, { "cite": "353 S.E. 2d 107", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "319 N.C. 103", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4743692, 4740912, 4746258, 4740023, 4740696 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc/319/0103-04", "/nc/319/0103-02", "/nc/319/0103-03", "/nc/319/0103-01", "/nc/319/0103-05" ] }, { "cite": "347 S.E. 2d 871", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "872" } ], "opinion_index": 0 }, { "cite": "82 N.C. App. 738", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8359921 ], "year": 1986, "pin_cites": [ { "page": "739" } ], "opinion_index": 0, "case_paths": [ "/nc-app/82/0738-01" ] }, { "cite": "354 S.E. 2d 734", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1987, "pin_cites": [ { "page": "736" } ], "opinion_index": 0 }, { "cite": "85 N.C. App. 324", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12169883 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc-app/85/0324-01" ] }, { "cite": "346 S.E. 2d 430", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "317 N.C. 437", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4772767 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/317/0437-01" ] }, { "cite": "333 S.E. 2d 488", "category": "reporters:state_regional", "reporter": "S.E.2d", "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", "year": 1985, "pin_cites": [ { "page": "916-17" } ], "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": "330 S.E. 2d 616", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1985, "opinion_index": 0 }, { "cite": "313 N.C. 612", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4722697, 4725936, 4721340, 4722525, 4724158 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/313/0612-03", "/nc/313/0612-05", "/nc/313/0612-01", "/nc/313/0612-02", "/nc/313/0612-04" ] }, { "cite": "325 S.E. 2d 260", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "72 N.C. App. 372", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526819 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc-app/72/0372-01" ] }, { "cite": "286 S.E. 2d 779", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1982, "pin_cites": [ { "page": "787" }, { "page": "917-918" }, { "page": "787" }, { "page": "787", "parenthetical": "noting the statutory provision applies \"where land or personalty is purchased with the separate property of either spouse\"" } ], "opinion_index": 1 }, { "cite": "305 N.C. 41", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565990 ], "weight": 4, "year": 1982, "pin_cites": [ { "page": "53" }, { "page": "53" }, { "page": "53" } ], "opinion_index": 1, "case_paths": [ "/nc/305/0041-01" ] }, { "cite": "338 S.E. 2d 815", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1986, "pin_cites": [ { "page": "816" } ], "opinion_index": 1 }, { "cite": "79 N.C. App. 170", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8519808 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "172" } ], "opinion_index": 1, "case_paths": [ "/nc-app/79/0170-01" ] }, { "cite": "346 S.E. 2d 430", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1986, "opinion_index": 1 }, { "cite": "317 N.C. 437", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4772767 ], "weight": 2, "year": 1986, "opinion_index": 1, "case_paths": [ "/nc/317/0437-01" ] }, { "cite": "333 S.E. 2d 488", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 1 }, { "cite": "314 N.C. 331", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4686660, 4695653, 4695471, 4689718, 4689592 ], "year": 1985, "opinion_index": 1, "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": 5, "year": 1985, "pin_cites": [ { "page": "916-17", "parenthetical": "explicitly adopting marital gift presumption rather than follow Wade" }, { "page": "918", "parenthetical": "citation omitted" }, { "page": "918" }, { "page": "917", "parenthetical": "emphasis added" } ], "opinion_index": 1 }, { "cite": "74 N.C. App. 144", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523505 ], "weight": 5, "year": 1985, "pin_cites": [ { "page": "155-56" }, { "page": "154" }, { "page": "157" }, { "page": "155" } ], "opinion_index": 1, "case_paths": [ "/nc-app/74/0144-01" ] }, { "cite": "325 S.E. 2d 260", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 1 }, { "cite": "72 N.C. App. 372", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526819 ], "year": 1985, "opinion_index": 1, "case_paths": [ "/nc-app/72/0372-01" ] } ], "analysis": { "cardinality": 940, "char_count": 28428, "ocr_confidence": 0.811, "pagerank": { "raw": 3.9469352688799803e-07, "percentile": 0.9036551937970129 }, "sha256": "29eb211e108d5fdcda99e0eee4263aadc3fce8c57ecb8422a01d6b4524814704", "simhash": "1:a103d0302107f5d5", "word_count": 4660 }, "last_updated": "2023-07-14T22:20:42.285314+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge HEDRICK concurs.", "Judge GREENE concurs in part and dissents in part." ], "parties": [ "CAROL HAYNES McLEAN (FISK) v. RUSSELL L. McLEAN, III" ], "opinions": [ { "text": "MARTIN, Judge.\nDefendant assigns error to the trial court\u2019s classification of the Camp Branch Road property, the office building, the Buie note and the Eagles Nest stock. He also assigns error to the valuation of his law practice and to the order that he repay plaintiff for the payments he collected under the Medford note after separation. Finally, defendant contends the trial court erred by distributing personal property listed in a handwritten memorandum signed by the parties, but not acknowledged before a certifying officer, in April 1984.\nDefendant\u2019s first contention is that \u201c[t]he court erred in failing to make appropriate findings of fact, conclusions of law, and orders that the defendant\u2019s separate inherited funds which were invested in the Camp Branch Road property and in the office building remained the separate property of the defendant.\u201d He also argues that \u201c[t]he trial court erred by requiring the defendant to present clear, cogent and convincing evidence to rebut the presumption of gift utilized by the trial court in regard to the Camp Branch Road property [and] office building.\u201d We disagree.\nIt is true that there may be both marital and separate ownership interests in the same property. Wade v. Wade, 72 N.C. App. 372, 325 S.E. 2d 260, disc. rev. denied, 313 N.C. 612, 330 S.E. 2d 616 (1985). Our courts have adopted a source of funds approach to distinguish marital and separate contributions to a single asset. Id. 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. Id. Thus, defendant contends the contributions from his inherited funds to the purchase price of the home and office building remain his separate property. However, \u201cwhere a spouse furnishing consideration from separate property causes property to be conveyed to the other spouse in the form of tenancy by the entireties, a presumption of a gift of separate property to the marital estate arises, which is rebuttable by clear, cogent, and convincing evidence.\u201d McLeod v. McLeod, 74 N.C. App. 144, 154, 327 S.E. 2d 910, 916-17, cert. denied, 314 N.C. 331, 333 S.E. 2d 488 (1985). By placing title to the properties in both names as tenants by the entirety, defendant is presumed to have made a gift of his separate property to the marital estate.\nDefendant argues that the presumption of marital gift for entireties property is no longer valid in this State and that the court erred by requiring him to present clear, cogent, and convincing evidence that he intended to retain a separate interest in the property. Defendant cites Johnson v. Johnson, 317 N.C. 437, 346 S.E. 2d 430 (1986), and Dunlap v. Dunlap, 85 N.C. App. 324, 354 S.E. 2d 734 (1987) as authority for his position. In Dunlap, this Court stated that a footnote in Johnson overruled a presumption stated in McLeod that all property acquired by the parties during the marriage is marital property. Id. at 328, 354 S.E. 2d at 736. The issue before us, however, is not whether all the property acquired during the marriage is presumed to be marital property, but whether the use of separate property to acquire property, title to which is taken as tenants by the entirety, creates a presumption of a gift to the marital estate. As neither Johnson nor Dunlap disturbed the presumption on this issue stated in McLeod, we hold that the trial court properly applied the presumption of a gift to the marital estate in this case.\nDefendant next contends that if the trial court was correct in applying the presumption of gift to the marital estate and in requiring him to present clear, cogent, \u00bfnd convincing evidence to rebut the presumption, then the court erred in finding he had not met his burden of proof. Defendant presented evidence showing the source of his separate funds and their application to the Camp Branch Road property and the office building. He also elicited testimony from plaintiff that she did not want to be awarded anything from defendant\u2019s inheritance. Whether defendant succeeded in rebutting the presumption of gift to the marital estate by clear, cogent, and convincing evidence is a matter left to the trial court\u2019s discretion. Defendant\u2019s evidence \u201cmay be clear and cogent, but evidently it was not convincing to the trial court.\u201d Draughon v. Draughon, 82 N.C. App. 738, 739, 347 S.E. 2d 871, 872 (1986), cert. denied, 319 N.C. 103, 353 S.E. 2d 107 (1987). There is some competent evidence to support the trial court\u2019s findings; therefore, its rulings will not be disturbed on appeal. Lawing v. Lawing, 81 N.C. App. 159, 344 S.E. 2d 100 (1986). These assignments of error are overruled.\nDefendant next contends the trial court erred in classifying the Buie note as marital property. He contends that even though both parties\u2019 names were on the note, the note remained his separate property. We agree with defendant that the Buie note is his separate property.\nThe presumption of gift created by the holding in McLeod was limited in its application to real property acquired by both spouses, as tenants by the entirety, in exchange for the separate property of one of them. We decline to extend that presumption to jointly held personal property which is acquired in exchange for the separate property of one spouse, as to do so would seem to defeat the legislative intent of G.S. 50-20(b)(2).\nManes v. Harrison-Manes, 79 N.C. App. 170, 172, 338 S.E. 2d 815, 816 (1986). Separate property remains separate property when it is exchanged for other separate property unless the conveyance states a contrary intention. G.S. 50-20(b)(2). The record discloses no evidence of such a contrary intent with respect to the Buie note. Even though both names are on the note, that fact alone is not sufficient to show an intent to make a gift to the marital estate. Manes, supra. The Buie note, property acquired in exchange for defendant\u2019s separate property, remains his separate property. Thus, the court erred in distributing it as part of the equitable distribution order.\nDefendant next contends that the court erred by classifying the Eagles Nest stock as marital property. Defendant testified that the stock, issued in his name alone, was a gift from the corporation\u2019s president, Mr. Tom Daniels, who filed a gift tax return with regard to the transfer. Defendant also testified that the stock was not given as payment for services to the corporation but that he continued to bill Eagles Nest for legal services. In his deposition, however, Mr. Daniels testified that while he did transfer the stock to defendant to involve defendant as an owner of the corporation, he expected defendant to be a local contact for the corporation and to perform managerial services. The corporation continued to pay defendant for his legal services, but defendant did not receive a managerial fee for his other services until he became an officer of the corporation. Mr. Daniels did not recall whether he filed a gift tax return with regard to the transfer of the stock. The court also found that both plaintiff and defendant visited the corporation\u2019s property \u201cto check on the property and follow the progress of various developments\u201d on the property. The evidence is sufficient to support the trial court\u2019s finding that the stock is marital property; therefore, its ruling will not be disturbed on appeal. Lowing, supra.\nDefendant assigns as error the admission at trial of plaintiffs opinion that the value of defendant\u2019s professional association was \u201cat least fifty thousand dollars\u201d on the date of separation. He does not argue this assignment of error. Thus, it is deemed abandoned. App.R. 28.\nDefendant also assigns error to the admission of the opinion of plaintiffs witness, Foster Shriner, regarding the value of defendant\u2019s law practice. Mr. Shriner, received by the trial court as an expert, testified that the value of the professional association on the date of separation was $61,910.00. Defendant contends that this testimony should have been excluded as the witness did not \u201cfollow the prerequisites as set forth in Poore v. Poore in making a determination as to the value of this professional association.\u201d The requirement for the admissibility of an expert\u2019s opinion is that it \u201cwill assist the trier of fact to understand the evidence or to determine a fact in issue.\u201d G.S. 8C-1, Rule 702. The criteria set out 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), are factors for the court to consider in valuing the professional interest and are not criteria for admissibility of the expert\u2019s opinion. Mr. Shriner explained the methods used to reach his opinion of value, and defendant was free to, and did, cross-examine the witness regarding the factors set out in Poore. We find no error in the admission of this evidence.\nDefendant also argues the court\u2019s valuation of the law practice at $35,000.00 is not supported by the evidence. \u201cThe task of the reviewing court on appeal is to determine whether the approach used by the trial court reasonably approximated the net value of the . . . interest.\u201d Poore v. Poore, supra at 419, 331 S.E. 2d at 270. Defendant testified and offered the testimony of several local attorneys that the value of his law practice on the date of separation was around $9,000.00 to $12,000.00. Plaintiffs witness Shriner valued the practice at $61,910.00. He reached this valuation by valuing the practice\u2019s assets and using a \u201cmultiple of earnings\u201d approach to arrive at his figure. Based on the figure supplied by Shriner, the trial court used a \u201creturn on investment\u201d approach to compute a value for the practice. Assuming arguendo that the \u201creturn on investment\u201d approach is an acceptable method of valuing a professional practice, there was no evidence before the court to support the rate of return used by the court in making its calculations or to indicate that such a method would yield an accurate valuation. Therefore we must vacate the court\u2019s findings with respect to the value of defendant\u2019s law practice.\nDefendant next excepts to the trial court\u2019s finding of fact that he converted the money collected from the Medford note to his own use and assigns error to the court\u2019s order that he be required to repay plaintiff the amount collected. At trial, defendant testified he used the sums collected from the Medford note to pay bills, house payments, insurance and \u201canything I need money for I\u2019ll put it in the Camp Branch property.\u201d His testimony supports the court\u2019s finding that defendant used the money for his own purposes; that finding is, therefore, conclusive. Lawing, supra. In addition, the court\u2019s order that defendant repay plaintiff for the amounts collected is not an abuse of its discretion and, therefore, will not be disturbed. See White v. White, 312 N.C. 770, 324 S.E. 2d 829 (1985).\n[71 Defendant also assigns error to the trial court's failure to find that he had made all payments on the Camp Branch Road property from the date of separation and to its failure to credit him with the amount of those payments, which were made from his post-separation, and thus separate, property. Hunt v. Hunt, 85 N.C. App. 484, 355 S.E. 2d 519 (1987), requires the court to credit a former spouse \u201cwith at least the amount by which he decreased the principal owed\u201d on marital debt by using his separate funds. Id. at 491, 355 S.E. 2d at 523. On remand, the court should enter an order crediting defendant with at least the amount by which he decreased the principal amount of the joint debt. Id.\n[8J By his final assignment of error, defendant contends the trial court erred by ordering the distribution of personal property in a manner different than previously agreed in a handwritten memorandum. We disagree. G.S. 50-20(d) requires that written agreements between spouses distributing property must be \u201cduly executed and acknowledged in accordance with . . . G.S. 52-10 and 52-10.1\u201d in order to be binding on the parties. As the handwritten agreement was not acknowledged before a certifying officer as defined in G.S. 5240(b), it was not binding upon the court and the court was free to distribute the property. This assignment of error is overruled.\nFor the reasons stated, the equitable distribution judgment entered in this case is vacated. This case is remanded for a new determination of the value of defendant\u2019s law practice, classification of the parties\u2019 property consistently with this opinion, and entry of an appropriate order distributing that property.\nVacated and remanded.\nChief Judge HEDRICK concurs.\nJudge GREENE concurs in part and dissents in part.", "type": "majority", "author": "MARTIN, Judge." }, { "text": "Judge Greene\nconcurring in part and dissenting in part.\nI concur in the majority\u2019s treatment of all but the \u201cCamp Branch Road\u201d property and buildings. I dissent from the majority\u2019s holding that defendant\u2019s use of his separate property to acquire the Camp Branch property and buildings \u201cby the entirety\u201d is presumed to be a \u201cgift\u201d to the marital estate. N.C.G.S. Sec. 50-20(b)(2) provides in part:\nProperty acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance. [Emphasis added.]\nThere is only one reasonable reading of this provision: However acquired property is titled, the manner of titling does not itself affect the separate status of property acquired in exchange for separate property; but an acquisition of property with separate funds nevertheless may be considered marital property if such an intent is \u201cexpressly stated in the conveyance.\u201d To hold that titling property by the entirety itself constitutes the necessary express intent renders the statutory provision a non sequitur.\nThe source of the majority\u2019s erroneous notion of a \u201cmarital gift presumption\u201d is McLeod v. McLeod, 74 N.C. App. 144, 327 S.E. 2d 910, cert. denied, 314 N.C. 331, 333 S.E. 2d 488 (1985). In construing the above-quoted provision of Section 50-20(b)(2), the McLeod court reasoned that the Legislature\u2019s addition of the \u201cexpress contrary intent\u201d exception embodies the common law analysis of Mims v. Mims, 305 N.C. 41, 286 S.E. 2d 779 (1982):\nPrior to Mims that provision read, \u2018property acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both.\u2019 G.S. 50-20(b)(2) (1981). Given that language, the Mims court wrote \u2018it does appear . . . that in the context of a divorce and the \u2018equitable distribution\u2019 of all \u2018marital property\u2019 the Legislature has opted for a rule that where land or personalty is purchased with the \u2018separate property\u2019 of either spouse, it remains the \u2018separate property\u2019 of that spouse regardless of how the title is made.\u2019 Mims, 305 N.C. at 53, 286 S.E. 2d at 787. In apparent response to this reading of the statute as it was written, the Legislature amended the separate provision to state that property acquired in exchange for separate property shall remain so regardless of title \u2018and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance.\u2019 [emphasis in original] [citation omitted]. . . . Thus the legislature appears to have availed itself of the reasoning in Mims whereby when spouses title their real property without regard to the source of the consideration a gift will be presumed. [Emphasis added.]\nMcLeod, 74 N.C. App. at 155-56, 286 S.E. 2d at 917-918 (quoting Mims, 305 N.C. at 53, 286 S.E. 2d at 787).\nThe McLeod construction of the statute in light of Mims is neither required by Mims itself nor permitted by the plain language of Section 50-20(b)(2). In order to incorporate the Mims result, the Legislature would have to completely delete that portion of the statute which states the manner of titling is irrelevant. The Legislature did not do this nor did it specifically \u201cavail itself\u2019 of the Mims reasoning: Instead of creating a presumption of gift to the marital estate as in Mims, the Legislature instead provided a method by which a spouse could make such a gift by expressing the specific intent to confer a gift in the conveyance itself.\nAs its interpretation contravened the language of Section 50-20(b)(2), the McLeod court was also constrained to create an apparent exception to the \u201csource-of-funds\u201d analysis previously adopted by this court in Wade v. Wade, 72 N.C. App. 372, 325 S.E. 2d 260 (1985). See McLeod, 74 N.C. App. at 154, 327 S.E. 2d at 916-17 (explicitly adopting marital gift presumption rather than follow Wade). Given the McLeod court\u2019s explicit refusal to follow Wade, it is perplexing that the court subsequently stated that \u201cthe marital gift presumption follows naturally from this court\u2019s previous decisions in Loeb [citation omitted] and Wade. ... In Loeb the Court held that property acquired during the marriage is presumably marital . . . .\u201d Id. at 157, 327 S.E. 2d at 918 (citation omitted) (emphasis added).\nMore important, our Supreme Court has expressly overruled the basic presumption of marital property underlying both Loeb and McLeod. See Johnson v. Johnson, 317 N.C. 437, 454 n.4, 346 S.E. 2d 430, 440 n.4 (1986). While the Johnson Court did not, strictly speaking, specifically address the notion of a \u201cmarital gift\u201d presumption, it expressly overruled the more basic presumption of marital property from which the McLeod court stated the \u201cmarital gift\u201d presumption \u201cfollows naturally.\u201d Cf. McLeod, 74 N.C. App. at 157, 327 S.E. 2d at 918. Furthermore, the Johnson Court\u2019s favorable citation of Wade in its footnote clearly demonstrates its belief that the Wade \u201csource-of-funds\u201d analysis does not allow a \u201cmarital gift\u201d presumption. 317 N.C. at 454 n.4, 346 S.E. 2d at 440 n.4 (in overruling the marital property presumption of Loeb and McLeod, the Court cited Wade as \u201ccontra\u201d Loeb and McLeod).\nI recognize that the provisions of Section 50-20(b)(2) also provide that \u201cproperty acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance.\u201d This provision may indeed \u201ccreate a presumption that gifts between spouses are marital property.\u201d McLeod, 74 N.C. App. at 155, 327 S.E. 2d at 917 (emphasis added). However, the provision provides no support for the McLeod notion that simply \u201ctitling\u201d property jointly creates a \u201cgift\u201d to the other spouse in the first place. Given the statutory provision that joint title is irrelevant to the classification of property acquired in exchange for separate property, the express \u201ccontrary\u201d intent required by the statute is itself the vehicle by which a spouse may evidence the intent to confer a \u201cgift\u201d on the other spouse. The McLeod interpretation simply assumes its desired conclusion as a basic premise.\nThe illogic of McLeod is further revealed by the limitation of McLeod expressed in Manes v. Harrison-Manes, 79 N.C. App. 170, 338 S.E. 2d 815 (1986). The Manes court wisely declined to extend the McLeod presumption to jointly-held \u201cpersonal\u201d property \u201cas to do so would seem to defeat the legislative intent of G.S. 50-20 (b)(2).\u201d 79 N.C. App. at 172, 338 S.E. 2d at 816. However, there is no principled distinction which would justify treating real and personal property so differently under Section 50-20(b)(2). Cf. Mims, 305 N.C. at 53, 286 S.E. 2d at 787 (noting the statutory provision applies \u201cwhere land or personalty is purchased with the separate property of either spouse\u201d). It is not the extension of McLeod, but McLeod itself, which \u201cdefeat[s] the legislative intent of G.S. 50-20(b)(2).\u201d\nDefendant\u2019s counsel vigorously argued this court should overrule McLeod as a direct contravention of the specific provisions of Section 50-20(b)(2). In affirming the trial court\u2019s disposition of the Camp Branch property and buildings, the majority ignores counsel\u2019s arguments and the plain language of Section 50-20(b)(2). I accordingly dissent from the majority\u2019s affirmance of the trial court in this respect and would remand so that, under Section 50-20 (b)(2), plaintiff, not defendant, would be required to demonstrate the conveyance contains the express intent that the Camp Branch property was acquired as a gift by defendant to the marital estate.", "type": "concurring-in-part-and-dissenting-in-part", "author": "Judge Greene" } ], "attorneys": [ "Riddle, Kelly & Cagle, P.A., by Robert E. Riddle, for plaintiff-appellee.", "Long, Parker, Payne & Warren, P.A., by Robert B. Long, Jr., and William A. Parker, for defendant-appellant." ], "corrections": "", "head_matter": "CAROL HAYNES McLEAN (FISK) v. RUSSELL L. McLEAN, III\nNo. 8728DC574\n(Filed 29 December 1987)\n1. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 tenancy by the entire-ties \u2014 consideration from separate property \u2014 presumption of gift\nThe presumption of a marital gift for entireties property purchased by a spouse with separate property is still the law in this state, and such presumption is rebuttable by clear, cogent and convincing evidence.\n2. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 presumption of gift to marital estate \u2014 insufficient rebutting evidence\nThe trial court did not err in finding that defendant husband failed to rebut the presumption of a gift to the marital estate of funds used to purchase a house and an office building placed in the names of both spouses as tenants by the entireties where defendant showed that he used funds inherited from his father in making such purchases and elicited testimony from plaintiff wife that she did not want to be awarded anything from defendant\u2019s inheritance.\n3. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 personal property \u2014 no presumption of gift\nEven though the names of both spouses were on a promissory note given in exchange for the husband\u2019s separate property, the note remained the husband\u2019s separate property where no contrary intention was stated in the conveyance. N.C.G.S. \u00a7 50-20(b)(2).\n4. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 stock in husband\u2019s name as marital property\nThe trial court did not err in classifying corporate stock issued in the name of defendant husband alone as marital property, although defendant testified that the stock was a gift from the corporation\u2019s president, where the president testified that he expected defendant to be a local contact for the corporation and to perform managerial services for the corporation.\n5. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 valuation of law practice-expert testimony\nThe trial court did not err in the admission of the opinion of plaintiff wife\u2019s expert witness regarding the value of defendant husband\u2019s law practice where the witness explained the methods used to reach his opinion.\n6. Divorce and Alimony 8 30\u2014 equitable distribution \u2014 valuation of law practice \u2014insufficient\nThe trial court\u2019s valuation of defendant\u2019s law practice at $35,000 was not supported by the evidence where the trial court used a \u201creturn on investment\u201d approach but there was no evidence before the court to support the rate of return used by the court or to indicate that such method would yield an accurate valuation.\n7. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 credit for mortgage payments after separation\nThe trial court in an equitable distribution action should have credited defendant with at least the amount by which he decreased the principal amount of the joint debt on the home of the parties by the payments made from his separate property after the date the parties separated.\n8. Divorce and Alimony 8 30\u2014 equitable distribution \u2014 personal property-distribution different from memorandum\nThe trial court did not err in ordering the distribution of personal property in a manner different than that agreed upon in a handwritten memorandum where the agreement was not acknowledged before a certifying officer as defined in N.C.G.S. \u00a7 52-10(b) and was thus not binding upon the court.\nJudge Greene concurring in part and dissenting in part.\nAppeal by defendant from Fowler, Judge. Judgment entered 13 November 1986 in District Court, BUNCOMBE County. Heard in the Court of Appeals 2 December 1987.\nPlaintiff Carol McLean Fisk and defendant Russell McLean were married 23 November 1966. In January 1984, the parties separated. On 3 January 1985, plaintiff filed an action seeking divorce, custody, child support, and equitable distribution of the marital property. Defendant answered and filed a counterclaim for child custody, divorce, and equitable distribution. On 29 March 1985, a judgment of absolute divorce, which also resolved the issues of custody and child support, was entered. The equitable distribution claim was heard on 2 May 1986.\nEvidence before the trial court tended to show the following: On 2 October 1978, defendant\u2019s father died, and defendant and his sister each inherited at least $100,000.00 in cash and property from their father\u2019s estate. Assets received by defendant from his father\u2019s estate were used to purchase some of the assets at issue in this case. At the time of the father\u2019s death, the parties had assets with a net value of approximately $45,000.00. Among those assets was a house which the parties sold for $39,662.38, applying the proceeds towards the purchase of a lot and construction of a home at 749 Camp Branch Road in Haywood County. In addition to those proceeds, the parties secured a loan of approximately $55,000.00 and used $75,311.17 of defendant\u2019s separate funds from his father\u2019s estate to build the house. Title to the Camp Branch Road property is held by the parties as tenants by the entirety.\nOn 12 October 1979, defendant and his sister sold a house inherited from their father to E. P. Buie and wife. The purchasers made a cash downpayment, part to defendant and part to his sister, and executed a note (Buie note) payable one-half to defendant\u2019s sister and one-half to defendant and plaintiff. Defendant opened two bank accounts in his name, one for his share of the downpayment and the other for the note payments.\nAlso in 1979, the parties purchased as tenants by the entirety an office building in Waynesville, North Carolina. Defendant paid $7,000.00 from his inheritance and both parties signed a note payable to the seller for three annual installments of $5,499.40 plus interest and assumed a first mortgage of $40,501.81. Defendant made the three installment payments from the following sources: an account containing defendant\u2019s separate funds from his inheritance; proceeds from the sale of stock defendant inherited from his father; and an account containing defendant\u2019s separate funds from the Buie note payments. Defendant set up another bank account for rents collected from the lease of the office building. The account was used to pay the building\u2019s operating expenses and to make the first mortgage payments.\nThe parties were also the payees of a $32,000.00 promissory note (Medford note) which was payable in 240 monthly installments of $236.20. Defendant collected 34 monthly payments during the period from the date of separation until the equitable distribution hearing. Defendant also held, in his name, 272 shares of stock of Eagles Nest Mountain Estates, Inc. (Eagles Nest). In addition, defendant was a shareholder in a law firm on the date of separation.\nIn its order, the court: (a) classified the Camp Branch Road property as marital property having a net value of $177,725.00 and ordered it distributed to the defendant; (b) classified the Buie note as marital property with a net value of $23,000.00 and ordered it distributed to plaintiff; (c) classified the Eagles Nest stock as marital property with a net value of $50,000.00 and ordered it distributed to plaintiff; (d) classified defendant\u2019s share of the law practice as marital property with a net value of $35,000.00 and ordered it distributed to defendant; (e) classified the office building as marital property with a net value of $59,082.72 and ordered it distributed to plaintiff; and (f) classified the Medford note as marital property with a net value of $21,441.72 and ordered it distributed to plaintiff. The court also found that defendant had appropriated the Medford note payments to his own use and ordered him to pay plaintiff $236.20 per month for 36 months beginning 1 November 1986 to reimburse plaintiff for the payments he collected.\nFrom this order, defendant appeals.\nRiddle, Kelly & Cagle, P.A., by Robert E. Riddle, for plaintiff-appellee.\nLong, Parker, Payne & Warren, P.A., by Robert B. Long, Jr., and William A. Parker, for defendant-appellant." }, "file_name": "0285-01", "first_page_order": 313, "last_page_order": 325 }