Barton v Barton

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NO. COA10-1160 NORTH CAROLINA COURT OF APPEALS Filed: 6 September 2011 DENISE H. BARTON, Plaintiff v. Wake County No. 07 CVD 20736 JOHN S. BARTON, Defendant. Appeal 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. 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. Rodden, for defendant-appellant. BRYANT, Judge. John and Denise Barton married on 12 April 1997. the marriage, Denise (plaintiff) biological father was deceased. had one minor Prior to child John (defendant) adopted the child. On 4 September 2006, the parties separated. December 2007, plaintiff distribution, and, counterclaims for filed defendant child whose a complaint filed custody, an seeking amended equitable On 28 equitable answer and distribution, and -2attorney fees. Child Custody The parties entered into a Consent Order for and Child Support, and, on 17 July 2008, parties entered into a consent order for arbitration the on the remaining issues. The arbitration was to be conducted pursuant to the Family Law Arbitration Act, N.C. Gen. Stat. ' 50-40 et seq. preserved their right to appeal errors of law. The parties The arbitration was held beginning 20 November 2008, and by the terms of the consent order, arbitrator. K. Edward Both parties Greene were was present designated and as represented the by counsel; both were permitted to testify, as well as, present exhibits. On 24 April Arbitration Decision Award. motion to confirm the 2009, the arbitrator signed the On 28 April 2009, plaintiff filed a arbitration award in the Wake County District Court. Defendant filed a motion to vacate or modify the on award based partiality figures[.] by the what defendant arbitrator and believed evident to be evident miscalculation of On 10 May 2010, following a 27 October 2009 hearing on the parties motions, the District Court denied defendant s motion, confirmed the Arbitration incorporated it into its order. Decision Award, Defendant appeals. _______________________________________ and -3On appeal, defendant argues the trial court erred (I) in adopting the arbitration award and (II) in confirming the arbitration award. Standard of Review [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. Nucor Corp. v. General Bearing Corp., 333 N.C. 148, 155, 423 S.E.2d 747, 751 (1992) (citation omitted). If 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 s rights. 50-54(a)(8) (2009). award where N.C. Gen. Stat. ' [T]he court shall modify or correct the . . . (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 . . . . Stat. ' 50-55(a)(1) (2009). If 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 N.C. Gen. -4has no power to revise the decisions of judges who are of the parties own choosing. An award is intended to settle the matter in controversy, and thus save the expense of litigation. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224, 236, 321 S.E.2d 872, 880 (1984) (discussing N.C. Gen. Stat. ' 1-567.14 (1983)). If 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. Semon v. Semon, 161 N.C. App. 137, 142, 587 S.E.2d 460, 464 (2003) (discussing N.C. Gen. Stat. ' 50-55) (citing Roofing Co., 312 N.C. at 236, 321 S.E.2d at 880). Cyclone On appeal of a trial court s decision confirming an arbitration award, we accept the trial court s findings of fact that are not clearly erroneous and review its conclusions of law de novo. First Union Secs., Inc. v. Lorelli, 168 N.C. App. 398, 400, 607 S.E.2d 674, 676 (2005) (citation omitted). I Defendant contends the trial court erred in adopting the arbitration property award. status Specifically, conferred upon he the contests the following marital pieces of -5property: (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 postseparation diminution in value of a Volvo; (H) a boat and trailer; (I) defendant s 401(k); (J) post-separation withdrawals from defendant s 401(k); (K) plaintiff s Prudential 401(k); (L) defendant s Observer McClatchy supplemental pension plan; executive (M) defendant s retirement plan; and News and (N) the SECU IRA #3966. In 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). [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 . . . . N.C. Gen. Stat. ' 50-20(a) (2009). Marital property is defined under North Carolina General Statutes, section 50-20(b)(1), in part, as follows: -6[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 . . . . N.C. Gen. Stat ' 50-20(b)(1) (2009). [M]arital property shall be valued as of the date of the separation of the parties . . . . N.C. Gen. Stat. ' 50-21(b) (2009). Separate property is defined, in short, as follows: [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. N.C.G.S. ' 50-20(b)(2) (2009). A. Appreciation in the Scott & Stringfellow account #1110 as marital property. Defendant 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 substantial activity. the balance increase, which occurred between the Thus, date of -7marriage and the date of separation, was the result of passive rather than active appreciation. We disagree. Generally, property acquired by a party before marriage remains that party s separate property, and increases in value to such separate property are acquired by that separate estate but only to the extent that the increases were passive . . . . Increases in value to separate property attributable to the financial, managerial, and other contributions of the marital estate are acquired by the marital estate. Ciobanu, 104 N.C. App. at 464-65, 409 S.E.2d at 751 (internal citations omitted). On appeal, defendant cites O Brien v. O Brien, 131 N.C. App. 411, 508 S.E.2d 300 (1998), where this Court upheld a trial court s determination that despite meetings between both spouses and the wife s broker, during which the spouses routinely chose between investment alternatives based on the broker s recommendation, such action did not elevate the status of the appreciation in the account from purely passive appreciation to active appreciation achieved by substantial activity. Id. at 419-20, 421, 508 S.E.2d at 306, 307. At the arbitration hearing, defendant testified that he met with his broker every month or two and that he authorized every trade. Further, defendant s evidence reflects frequent trading activity in account #1110 during the time of marriage and prior -8to the date of separation. While defendant presents O Brien 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 Brien 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 s findings of fact and the findings supported the trial court s conclusion of law. The 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 s argument is overruled. B. The calculation of the appreciation of account #1110 Defendant 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. -9While defendant cites no authority, his argument proposes what is referred to as the source of funds rule: each party retain[s] as separate property the amount he or she contributed . . ., plus the increase on that investment due to passive appreciation. 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)). that where under N.C. [the] Gen. defendant Stat. § However, this Court has held failed to 50-20(b)(1) rebut that the the presumption funds in the account as of the date of separation were marital . . . the trial court properly classified the entire account balance as marital property. Stovall v. Stovall, ___ N.C. App. ____, ___, 698 S.E.2d 680, 688 (2010). Defendant s 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 s records show two accounts at Wheat First Securities account 4695 and account 4717 that were merged during the marriage. Prior to the balance transfer of the surviving account, account 4695, to Scott & Stringfellow -10account #1110 during 2003, defendant s 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 s failure to classify the $95,546.89 rollover from See Ciobanu, 104 N.C. App. at Wheat First as separate property. 465, 409 S.E.2d at 751 ( Increases in value to separate property attributable to contributions of marital the the financial, marital estate. ). managerial, estate Therefore, are there and acquired was no other by the 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 property. appreciation in account #1110 as marital Defendant s argument is overruled. C. The existence of any marital component in Scott & Stringfellow account #1110 Defendant 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 -11marriage, and these funds were traced into Scott & Stringfellow account #1110 and completely traced out. For the reasons stated in subparts A and B supra, we overrule this contention. D. Distribution of separate property Defendant argues that the arbitrator erred in ordering him to purchase separate assets from [plaintiff] for a total of $145,000.00. Defendant contends that the arbitrator failed to credit him with providing all the consideration amounting to $291,212.00 for Lots 7 and 8 from his separate funds. We disagree. Our courts have adopted a source of funds approach to distinguish asset. marital and separate contributions to a single 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. 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)). In Wade, this Court reviewed an equitable distribution order in which it was confronted with the question of whether a court could award one spouse s separate property to the opposing party. Wade, 72 N.C. App. at 382, 325 S.E.2d at 270. The -12parties house had been constructed after the date of marriage on land purchased by the plaintiff prior to the marriage. at 378, 325 S.E.2d at 267. Id. The Court reasoned that though the house was marital property and the land was plaintiff s separate property, they represented one asset. Id. at 377, 325 S.E.2d at 267. of And, because of the presence 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. If it is necessary in order to achieve an equitable distribution of the marital property that the court award that part of the [plaintiff s] 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. Id. at 382-83, 325 S.E.2d at 270. Here, the arbitrator ordered that defendant pay plaintiff $126,000.00 and $19,000.00 a total of $145,000.00 for plaintiff s separate portion of the properties located at 6909 -13Landingham 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. valued at $252,000.00. On the date of marriage, Lot 7 was 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 s separate property interest in Lot 7 was valued at $126,000.00. Lot 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 $38,000.00. the date Under of the marriage, same Lot rationale 8 was applied valued to Lot at 7, plaintiff s separate property interest in Lot 8 was valued at $19,000.00. On the date of separation, the value of Lot 7 had increased to $320,000.00; arbitrator Lot awarded 8 Lot property. However, $126,000.00 had 7 increased and defendant representing the Lot was 8 to to defendant ordered value of $52,500.00. to as pay plaintiff s The marital plaintiff separate -14interest in Lot 7, and $19,000.00 representing the value of her separate interest in Lot 8. Defendant does not contest the arbitrator s conclusion that titling the properties in both his and plaintiff s names prior to the date of marriage represented a gift to plaintiff of onehalf of the property interest. contained a separation, marital the property arbitrator properties in the award. The arbitrator had And, as Lot 7 and Lot 8 each the component had on authority to the date of distribute the See id. at 382, 325 S.E.2d at 270. power to distribute the property to defendant, including plaintiff s 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 s argument is overruled. E. The appreciation in value of Lot 8 Defendant 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 [n]o evidence was presented of any marital contributions, -15monetary or otherwise, to account for the appreciation of each party s one half interest . . . . Presuming the accuracy of the argument, defendant does not indicate how he has been prejudiced. The trial court s 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 to equalize the division of marital . . . assets . . . . Reclassifying the appreciation of Lot 8 from marital to separate property would individual not one-half diminish interest change the total value trial court order. or in increase the conferred either property each party and parties would not pursuant to the Therefore, we overrule this argument. F. The marital property component of the Countryview Road Defendant argues that the arbitrator erred in calculating the appreciation located at contends market 6016 that value of marital Countryview the of the arbitrator the component Road. the Specifically, incorrectly Countryview of property calculated as of the property defendant the fair date of -16marriage. We disagree. In 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 sound[.] Walter v. Walter, 149 N.C. App. 723, 733, 561 S.E.2d 571, 577 (2002) (internal citations omitted). Defendant 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 s argument is overruled. See N.C.G.S. ' 50-55(a)(1); see also, e.g., Semon, 161 N.C. App. 137, 587 S.E.2d 460 (overruling the appellant s argument where he merely argued that the arbitrator should have used a different methodology in valuing the marital property). G. The diminution of value of the Volvo -17Defendant 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. Divisible property 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. N.C.G.S. ' 50-20(b)(4). shall determine what Upon application of a party, the court 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. N.C.G.S. ' 50- 20(a). The arbitrator found that on the date of separation, the value of the vehicle was $21,000.00. after the date of separation, he Defendant testified that drove the vehicle and had accidents that, on two occasions, resulted in minimal damage. -18The 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 $13,000.00. decrease in the value of the vehicle was Because the basis for the Volvo s decrease in value cannot be attributed to the actions of one spouse and occurred after the date of separation, the arbitrator s 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. 50-20(b)(4), '' 50-55. Defendant s argument is overruled. H. Determination that the boat and trailer were marital property Defendant argues that the arbitrator erred in conferring marital property purchased during status the upon a marriage. boat and trailer Defendant that contends were 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. Because of our holdings in subparts A and B above, we overrule defendant s argument. I. Defendant s McClatchy 401(k) component of $55,500.00 plan had a marital -19Defendant argues that the arbitrator erred in concluding that his account in Publishing Company $55,500.00 marital the McClatchy Company Money Shelter component. News and Observer 401(k) Plan Defendant retained contends that a 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 McClatchy Company basis, defendant 401(k) plan is his contends that his separate property. We disagree. Defendant provided exhibits and testimony in support of his contention made to that the defendant s component. $39,681.57 McClatchy 401(k) plan Defendant in marital Company contributions 401(k) plan. account contained determined that a the had been Therefore, marital property 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 -20withdrawals made prior to the parties separation amounted to $42,196.04 but, according to defendant s 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. Having established that defendant s 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 s argument is overruled. J. Postseparation withdrawals from the McClatchy 401K Defendant argues that the arbitrator erred in using the rollover of defendant s 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. -21K. Plaintiff s Prudential 401(k) and related debt Defendant determination argues that that the plaintiff s arbitrator account in erred North the in his Carolina State Employee s 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. Marital property is to be valued as of the date of the separation of the parties. N.C.G.S. ' 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 s 401(k) account was valued at $58,524.00. However, according to plaintiff s records, on 4 September 2006, her account balance in the State of North Carolina 401(k) Plan was $87,523.38. evidence of separate property was presented. No 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 s 401(k) account balance on the date of separation included plaintiff s contributions made after the -22date of separation, as well as, losses in the account occurring after the ordered date of defendant equalize the separation. to pay division of Given that the trial plaintiff a distributive marital and divisible court award to assets and debts[,] we remand this matter for modification of the award of the marital and separate property components of plaintiff s Prudential 401(k) plan as well as the distributive award payable to plaintiff in a manner consistent with this opinion. L. Date of separation value of defendant s McClatchy Company Pension Plan Defendant argues that the arbitrator erred in finding that the value of the joint life portion of defendant s 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. Marital property is to be valued as of the date of the separation of the parties. N.C.G.S. ' 50-21(b). defendant September separated on 4 2006. Plaintiff and The Arbitration Decision Award confirmed and incorporated by the trial court in its order states that defendant s McClatchy Company retirement -23plan account is marital property with a date of separation value of $20,648.00. value of The record reflects that a $20,648.00 lump sum defendant s 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. record of a separation. different There is no other evidence in the account valuation as of the date of The finding that the lump sum value of defendant s 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 s order to reflect a lump sum annuity benefit valued as of 4 September separation, in the amount of $18,039.00. 50-55(a)(1). 2006, the date of See N.C. Gen. Stat. ' Because the arbitration award as confirmed by the trial court s 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. M. The marital component of defendant s News Observer supplemental executive retirement plan and Defendant argues that the arbitrator erred in finding that thirty percent of defendant s News and Observer Supplemental -24Executive Retirement Defendant contends Plan that account the fraction was marital used to property. 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. ' 50-20.1(d). Defendant asserts that the denominator of the fraction should reflect the duration of defendant s employment with the News and Observer from 1977 through 2000, rather than only the time through 2000. Under defendant participated in the plan from 1989 We disagree. North Carolina General Statutes, section 50-20.1, [t]he award of vested pension, retirement, or other deferred compensation benefits may be made payable . . . (2) [o]ver a period of time in fixed amounts by agreement . . . . Stat. ' 50-20.1(a)(2) (2009). N.C. Gen. The award shall be determined using the proportion of time the marriage existed (up to the date of separation employment which retirement, or of the earned deferred parties), the vested compensation simultaneously and with nonvested benefit, to the pension, the total amount of time of employment. N.C. Gen. Stat. ' 50-20.1(d) (2009). shall This section . . . apply to all pension, retirement, and other deferred compensation plans and funds . . . . N.C.G.S. ' 50-20.1(h). Known as the fixed percentage -25method, the Court has interpreted the description of the denominator in section 50-20.1(d) as being the total amount of time the employee spouse is employed in the job which earned the vested pension or retirement rights. Gagnon v. Gagnon, 149 N.C. App. 194, 198, 560 S.E.2d 229, 231 (2002) (citation and internal quotations omitted). Defendant 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 funded entirely by the News and Observer. formal service requirement for plan entry. plan The plan had no Defendant testified that he believed his entry into the plan was intended as golden handcuffs, granted to [defendant] employee at the News & Observer. to retain [him] as an The arbitrator determined that the award was to be premised upon the time the marriage existed benefit) (simultaneous 34 months, with as the employment compared to that the earned amount of the time defendant participated in the retirement plan (from 15 December 1989 until 26 February 2000) 123 months. Acknowledging that this is a non-qualified plan with no formal service requirement or qualification for plan entry and participation is conferred -26on a case-by-case basis, the arbitrator s 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 123 months is not an evident mistake. 55(a)(1). N.C.G.S. ' 50- Therefore, defendant s argument is overruled. N. The marital component of SECU IRA Defendant argues that the arbitrator erred by finding that the value of the Individual Retirement Account (IRA) held in State Employees 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. Defendant 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 IRA was $109,425.00. property was separate. The amount rolled into Defendant testified that most of the However, he worked for eight-and-a-half months during his marriage to accrue benefits under the defined -27benefit 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. details both the calculation of Defendant s evidence 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. September Following 2006, the account separation #3966 was of the valued parties at on 4 $55,461.84. Defendant testified that the account was totally deleted at the time of the arbitration hearing, but, on 1 July 2005, the marital component arbitrator s of the determination account that was $6,525.00. defendant s required The 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. ' 50-55(a)(1). Therefore, defendant s argument is overruled. II Defendant argues that the trial court erred in adopting the arbitration decision asserted errors. award because However, while we of the aforementioned reverse and remand this -28matter to the Wake County District Court for modification of two portions of the court s order, defendant does not argue nor do we find that the arbitrator or the trial court committed an error of law prejudicing defendant s rights, providing a basis to vacate the order. See N.C.G.S. 50-54(a)(8). Therefore, we overrule defendant s argument. Affirmed in part; reversed in part; and remanded. Judges ELMORE and GEER concur.

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