An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA07-1542
NORTH CAROLINA COURT OF APPEALS
Filed:
4 November 2008
ROBERT BRUCE JONES,
Plaintiff-Appellant
v.
Brunswick County
No. 02 CVD 914
TAMELA S. JONES,
Defendant-Appellee
Court of Appeals
Appeal by plaintiff from order entered 7 June 2007 by Judge
Nancy Phillips in Brunswick County District Court.
Heard in the
Court of Appeals 20 August 2008.
Slip Opinion
David M. Godwin, for plaintiff-appellant.
The Del Re’ Law Firm, PLLC, by Benedict J. Del Re’ Jr., for
defendant-appellee.
CALABRIA, Judge.
Robert
Bruce
Jones
(“plaintiff”)
appeals
an
equitable
distribution order entered 7 June 2007 regarding real property,
divisible property, and the valuation of the parties’ closely held
business.
We affirm the trial court’s order.
Plaintiff and Tamela Jones (“defendant”) (collectively “the
parties”) were married on 25 July 1998, separated on 7 May 2001,
and divorced on 25 July 2002.
Plaintiff’s divorce complaint
included a claim for an equitable distribution of property with an
unequal distribution in his favor.
-2Prior to the marriage, plaintiff owned a business that sold
playground equipment. During the marriage, plaintiff incorporated
his business, and changed the name from Southern Playgrounds to
Playground Specialists, Inc. (“Playground Specialists”).
The
success of the business was attributed in part to the income
generated from numerous military contracts.
Subsequent to the
parties’ divorce, appellant changed suppliers and the business
stopped receiving military contracts.
Prior to the marriage the defendant purchased three lots
located on Oak Island, North Carolina.
Three weeks after the
parties’ marriage, defendant sold two of the three lots.
parties
agreed
that
the
Oak
Island
property
was
to
Both
remain
defendant’s separate property.
During the marriage, the parties acquired a lot in Moore’s
Creek Village that served as the marital residence.
After the
parties separated, the defendant lived in the residence and was
responsible for the post-separation mortgage payments, as well as
the insurance and property taxes.
Defendant’s payments totaled
$46,303.34.
Plaintiff paid three mortgage payments for a total of
$1,860.96.
The court found the appreciation of the marital
residence was divisible property.
Standard of Review
“[T]he trial court is vested with wide discretion in family
law cases, including equitable distribution cases.” Wall v. Wall,
140
N.C.
App.
303,
307,
536
S.E.2d
647,
650
(2000).
“The
distribution of the marital estate is left to the sound discretion
-3of the trial court and will not be disturbed on appeal absent an
abuse of discretion.”
Offerman v. Offerman, 137 N.C. App. 289,
297, 527 S.E.2d 684, 689 (2000) (citations omitted).
A trial court may be reversed for abuse of
discretion only upon a showing that its
actions are manifestly unsupported by reason,
or that its ruling could not have been the
result of a reasoned decision. ... Only when
the evidence fails to show any rational basis
for the distribution ordered by the court will
its determination be upset on appeal.
Furthermore, for purposes of appellate review,
the trial court’s findings of fact are
conclusive if supported by any competent
evidence in the record.
Smith v. Smith, 111 N.C. App. 460, 471, 433 S.E.2d 196, 203 (1993)
(citations omitted).
I.
Valuation of Business
Plaintiff initially argues that the trial court erred by
valuing the parties’ closely held business as of the date of
separation.
court
Specifically, the plaintiff argues that the trial
should
military
not
contracts
have
in
included
the
the
revenues
calculation
of
his
attributable
average
to
annual
revenues since plaintiff did not expect to receive future military
contracts.
We disagree.
“In valuing a marital interest in a business, the task of the
trial court is to arrive at a date of separation value which
‘reasonably approximates’ the net value of the business interest.”
Offerman, 137 N.C. App. at 292, 527 S.E.2d at 686 (citing Poore v.
Poore, 75 N.C. App. 414, 422, 331 S.E.2d 266, 272 (1985)). The
valuation will not be disturbed on appeal “if it appears that the
trial court reasonably approximated the net value of the practice
-4. . . based on competent evidence and on a sound valuation method
or methods . . . .”
Id. at 293, 527 S.E.2d at 686.
“[E]vidence
of preseparation and postseparation occurrences or values is
competent
as
corroborative
evidence
of
the
value
of
marital
property as of the date of the separation of the parties.”
N.C.
Gen. Stat. § 50-21(b) (2007).
Plaintiff’s expert in business valuation devoted four to
seven hours appraising the business.
He used the revenue multiple
method approach and the capitalized earnings approach, based upon
the normal and expected profit, to complete appraisals of both the
date of marriage value and the date of separation value.
Defendant’s appeal focuses on the use of gross sales in the
valuation decision.
Gross sales for the business were $518,906
and $576,350, in years 2000 and 2001, respectively.
However,
plaintiff’s
military
expert
deducted
the
total
value
of
all
contracts for years 2000 and 2001 and readjusted the gross sales
basing the calculations on gross revenues of $300,495 and $294,257
and disregarded actual sales for the two years and the successive
years.
Using a revenue multiplier of 31.3% plaintiff’s expert
valued the business as of the date of separation at $90,895.
Plaintiff’s expert chose not to use the 42% revenue multiplier he
indicated was typical for contract installers, the category to
which plaintiff’s business fit.
At the request of the defendant,
plaintiff’s expert calculated an alternative valuation using the
actual sales for the two years given the same weight and the
actual average revenue multiple for contract installers at 42% per
-5his report.
For this alternative, he provided a valuation of
$234,024.84.
The trial court adopted the expert’s testimony as to the
value of the corporation based upon the actual sales for 2000 and
2001 using a revenue multiplier of 42%, disregarding the expert’s
preferred revenue multiple of 31.3%.
The trial court accepted the
alternate valuation and determined the fair market value of the
corporation as of the date of separation was $234,024.
The court
gave the plaintiff a credit of $57,563, the value of the business
at the date of marriage, yielding a net marital value of $176,461.
While plaintiff does not assign error to the trial court’s
use of the higher revenue multiplier when arriving at the business
value, plaintiff contends the trial court erred by using actual
revenues for years 2000 and 2001 in the valuation of the company.
Plaintiff argues that the trial court should have accepted the
expert’s appraisals upon discounting the actual revenue during
2000 and 2001 because the revenue generated by the military
contracts
during
those
valuing the company.
plaintiff’s
revenue
years
should
have
been
eliminated
in
Due to a switch in suppliers in 2004
would
decrease
since
he
was
unlikely
to
receive large military contracts in the future.
Evidence that the plaintiff had severed his relationship with
the
supplier
that
provided
access
to
correctly considered by the trial court.
military
contracts
was
However, the court found
that Playground Specialists had gross sales of $521,073.90 in
2003, two years after separation of the parties, and received a
-6military contract that same year.
The trial court chose to use
the actual sales for the years 2000 and 2001, rather than the
sales excluding the revenue from military contracts for those two
years, because the court found the expert was attempting to lower
the value of the company.
The court also found that valuation
based on actual sales was a more accurate estimation of the value
of the company.
The
plaintiff
contends
that
Offerman allows
a
court
to
consider the loss of contracts post-separation when determining
the value of a business.
In Offerman, prior to separation, the
wife froze funds the husband needed to comply with a business
contract which
relationship.
resulted
in
the termination
of
that
business
The Court held that the action on the part of the
wife, and its effect on the business, could be considered in an
appraisal of the business.
S.E.2d at 688.
Offerman, 137 N.C. App. at 297, 527
Offerman is distinguishable from the present case.
In the case before us, the wife did not interfere with the
business.
supplier
The plaintiff chose to sever the relationship with the
that
assisted
him
in
obtaining
military
contracts,
therefore Offerman is inapplicable.
The trial court based its valuation decision on several
factors.
Specifically,
the
valuation
was
based
on
evidence
regarding gross sales, the assets owned by the company, the
ability of the company to generate loans to the plaintiff, cash
flow, and the ability to acquire new equipment during the marriage
and post-separation.
The court examined all of the evidence and
-7reasonably approximated the net value of Playground Specialists,
based upon competent evidence using a sound valuation method.
Plaintiff has failed to show any abuse of discretion, and the
trial court’s valuation of the business will not be disturbed by
this Court.
II. Oak Island Property
Plaintiff next argues that the trial court erred in ordering
plaintiff to pay defendant the value of a one-half interest in the
remaining Oak Island lot (“the lot”) in distributing the marital
estate.
The sole question is whether it was proper for the trial
court to consider the ownership of the lot when distributing the
marital estate.
When a trial court determines that an equal division of the
marital estate would not be equitable, the court shall consider
all the factors enumerated in N.C. Gen. Stat. § 50-20(c)(1) in
dividing marital and divisible property equitably.
The factors
the court should consider include, among others: “(1) The income,
property, and liabilities of each party at the time the division
of property is to become effective,” and “(12) Any other factor
which the court finds to be just and proper.”
N.C. Gen. Stat. §
50-20(c)(1) (2007).
In the instant case, the trial court considered the statutory
factors.
Specifically, the trial court found that plaintiff’s
earnings were higher than defendant’s during the marriage.
The
court made detailed findings concerning property belonging to both
parties, as well as the nature of the property owned, the amount
-8of debt outstanding on the marital property, and the source of
funds used to purchase and maintain the properties.
The three lots defendant acquired at Oak Island on 23 June
1998, were acquired in exchange for her separate property, i.e.
funds from a separate bank account holding proceeds from an
inheritance (“separate funds”).
Plaintiff paid a deposit of $500
and defendant paid the balance of $29,693.17.
The property was
titled in the parties’ separate names as tenants in common and
remained so throughout the marriage, even though it was not the
defendant’s intention to include plaintiff’s name on the deed, and
plaintiff did not know how his name appeared on the deed.
After two of the three lots were sold, defendant received a
total sum of $27,000.
Defendant retained the entire amount as her
separate funds and used the separate funds to pay taxes on the lot
during the marriage as well as the post-separation period.
As a
result of plaintiff’s name erroneously appearing on the deed, the
court found the value of the Oak Island lot increased plaintiff’s
separate estate.
The standard of review is abuse of discretion.
“A ruling
committed to a trial court’s discretion is to be accorded great
deference and will be upset only upon a showing that it was so
arbitrary that it could not have been the result of a reasoned
decision.”
(1985).
White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833
The
court
found
that
plaintiff’s
separate
estate
increased by the sum of $82,500 without the plaintiff providing
anything of value for the interest.
Perhaps the trial court could
-9have given greater weight to different evidence, however this
Court cannot reweigh the evidence.
Pegg v. Jones, __ N.C. App.
__, __, 653 S.E.2d 229, 231 (2007).
Therefore, we find that the
award is not arbitrary, and is the result of a reasoned decision.
III. Divisible Property
Finally, plaintiff argues that the trial court erred in
crediting defendant with post-separation mortgage payments as part
of the equitable distribution during the time defendant was in
possession of the residence.
We disagree.
This Court has previously held that the trial court has the
discretion to treat post-separation payments toward marital debt
as a distributional factor.
Fox v. Fox, 103 N.C. App. 13, 21, 404
S.E.2d
Dollar-for-dollar
354,
358
(1991).
separation debt payments have been allowed.
App. 649, 655, 559 S.E.2d 268, 273 (2002).
credit
for
post-
Hay v. Hay, 148 N.C.
However, the preceding
cases relied upon the language in N.C. Gen. Stat. § 50-20 prior to
the 2002 amendment.
The definition of divisible property was
amended to include decreases in marital debt.
Laws ch. 159, § 33.5.
2002 N.C. Sess.
Payments that decrease marital debt, “to
the extent made after 11 October 2002-constitute[] divisible
property.”
Warren v. Warren, 175 N.C. App. 509, 517, 623 S.E.2d
800, 805 (2006).
However, “[t]here shall be an equal division by
using net value of marital property and net value of divisible
property unless the court determines that an equal division is not
equitable.”
N.C. Gen. Stat. § 50-20(c) (2007).
If this is the
case, the court may “divide the marital property and divisible
-10property equitably.”
N.C. Gen. Stat. § 50-20(c) (2007).
“[T]he
law affords trial courts wide discretion in determining how to
treat post-separation mortgage payments by one spouse.”
Hay, 148
N.C. App. at 655, 559 S.E.2d at 273.
In the case sub judice, the trial court made an in kind
distribution of the parties’ assets and debts.
As a result of the
non-liquid nature of the assets in the estate and the need to keep
the assets intact and free from any interference from the other
party, the court made a distributive award of $30,000.
In addition to the trial court’s division of the assets,
plaintiff and defendant received a dollar-for-dollar credit for
the respective amounts they paid towards the mortgage, postseparation.
These payments made by each party decreased the
marital debt, increased the equity in the marital residence, and
were properly considered divisible property. The trial court made
findings of fact valuing this divisible property.
The defendant also paid the taxes and insurance on the
marital residence post-separation.
The court considered these
payments in dividing the estate and gave defendant credit for the
payments.
Since these payments are post-separation payments for
the benefit of the marital estate, the trial court could properly
consider them in an equitable distribution proceeding.
Plaintiff asserts that Warren indicates defendant’s postseparation payments should be classified as divisible property,
and in that regard there is no dispute.
Warren, and the plain
language of N.C. Gen. Stat. § 50-20(b)(4) indicate the same.
-11Warren, 175 N.C. App. at 517, 623 S.E.2d at 805.
appears
to
argue,
however,
that
because
the
Plaintiff
post-separation
payments are divisible property that Warren requires an equal
distribution.
This is not the holding in Warren.
Warren neither
indicates that the division of property must be equal, nor what
should be done in instances where the division is not equal.
In the case sub judice, the trial court held that an unequal
distribution of property would be equitable and chose to divide
the property equitably, but did not divide the property equally.
The trial court was vested with wide discretion in the equitable
distribution proceeding.
Plaintiff has failed to show the trial
court’s holding was not the result of a reasoned decision and was
arbitrary.
The trial court is affirmed.
Affirmed.
Judges TYSON and ELMORE concur.
Report per Rule 30(e).
