Taylor v. Taylor

265 S.E.2d 626 (1980)

Nancy H. TAYLOR v. William F. TAYLOR.

No. 782DC452.

Court of Appeals of North Carolina.

May 6, 1980.

*629 Carter, Archie & Grimes by W. B. Carter, Jr., Washington, for plaintiff-appellee.

Mattox & Davis by Fred T. Mattox and Gary B. Davis, Greenville, for defendant-appellant.

PARKER, Judge.

By appropriate assignments of error based on exceptions duly noted, defendant challenges certain of the court's crucial findings of fact as being unsupported by the evidence and challenges in turn all of the court's conclusions of law as being unsupported by the factual findings. Although a number of these assignments of error have merit, we find it unnecessary to pass upon them seriatim. We find the judgment itself, when viewed in the light of all of the evidence, so affected by errors of law that it must be vacated.

G.S. 50-16.1(1) defines "alimony" for purposes of G.S. Ch. 50 as follows:

"Alimony" means payment for the support and maintenance of a spouse, either in lump sum or on a continuing basis, ordered in an action for divorce, whether absolute or from bed and board, or an action for alimony without divorce.

G.S. 50-16.7(a), in pertinent part, provides:

*630 Alimony or alimony pendente lite shall be paid by lump sum payment, periodic payments, or by transfer of title or possession of personal property or any interest therein, or a security interest in or possession of real property, as the court may order.

Although these statutes authorize the court, in a proper case, to order alimony to be paid in a lump sum, such an award can only be made for "alimony," that is, for "payment for the support and maintenance of a spouse." G.S. 50-16.1(1). The court has no power to order such a payment either to punish the supporting spouse or to divide his estate. See Schloss v. Schloss, 273 N.C. 266, 160 S.E.2d 5 (1968); Taylor v. Taylor, 26 N.C.App. 592, 216 S.E.2d 737 (1975). The lump sum payment of $50,000.00 ordered by the court in the present case appears to be more a division of defendant's estate than it is an award of alimony. Compliance with the order would require not only that defendant pay over to his wife all of his cash assets, being the $30,000.00 remaining from the sale of his business, but would also require that he raise an additional $20,000.00 in cash from his remaining assets. From the evidence, defendant's remaining assets consist primarily of his one-third undivided interest in a farm in Greene County and in his interest in "three-eighths of a contract in conjunction with a partnership" with his father and sister in farm properties in Lenoir County. There is no evidence in the record to indicate either what the value of these farm properties might be or how readily defendant's undivided interests therein could be converted into cash. The order appealed from contains the statement "[t]hat the Court takes judicial notice that the above mentioned farm properties not only have a substantial fair market value but afford a ready and accessible source of capital." The market value and liquidity of tracts of real property are not matters of which a court may take judicial notice, and it was error for the court in this case to do so. Moreover, even had there been competent evidence to support factual findings by the court of the matters of which it purported to take judicial notice, it is apparent that the effect of the court's order would be to force defendant to liquidate, either by sale or mortgage, his only remaining assets having any substantial value, not for the purpose of paying for the support and maintenance of his wife, but in order to effect a division of his estate with her. This the court had no power to do.

In other respects also the court committed error in the order appealed from. G.S. 50-16.1 defines the terms "dependent spouse" and "supporting spouse" as follows:

(3) "Dependent spouse" means a spouse, whether husband or wife, who is actually substantially dependent upon the other spouse for his or her maintenance and support or is substantially in need of maintenance and support from the other spouse. (4) "Supporting spouse" means a spouse, whether husband or wife, upon whom the other spouse is actually substantially dependent or from whom such other spouse is substantially in need of maintenance and support.

In a recent case, Williams v. Williams, 299 N.C. 174, 261 S.E.2d 849 (1980), decided after the trial of the case before us, our Supreme Court discussed the provisions of G.S. 50-16.1 et seq. as they relate to a determination of dependency in suits for alimony. The factual situation presented in Williams was somewhat unusual, in that two parties of considerable wealth were involved; however, the opinion emphasized that "the principles established by this decision apply to parties of all economic status." 299 N.C. at 189, 261 S.E.2d at 859.

Interpreting the legislative intent in the enactment of G.S. 50-16.1, subsections (3) and (4), the court held in Williams that interpretation of the definition of the term "dependent spouse" contained in G.S. 50-16.1(3) requires that that provision be read in pari materia with G.S. 50-16.5, the statute for determining the amount of alimony. G.S. 50-16.5(a) provides that "[a]limony shall be in such amount as the circumstances render necessary, having due regard to *631 the estates, earnings, earning capacity, condition, accustomed standard of living of the parties, and other facts of the particular case." The court then applied the factors of G.S. 50-16.5 to establish guidelines to be used by trial courts in the determination of dependency:

(1) The parties must have been legally married to each other and one spouse must have been adjudged to have committed one of the grounds for alimony under G.S. 50-16.2 or have stipulated that one of the grounds is present. These are findings of fact which must be entered into the record by the trial court. (2) The incomes and expenses measured by the standard of living of the family as a unit must be evaluated from the evidence presented. If this comparison reveals that one spouse is without means to maintain his or her accustomed standard of living, then the former would qualify as the dependent spouse under the phrase "actually substantially dependent." G.S. 50-16.1(3). (3) If the comparison does not reveal an actual dependence by one party on the other, the trial court must then determine if one spouse is "substantially in need of maintenance and support" from the other. In doing so, these additional guidelines should be followed: A. The trial court must determine the standard of living, socially and economically, to which the parties as a family unit had become accustomed during the several years prior to their separation. B. It must also determine the present earnings and prospective earning capacity and any other "condition" (such as health and child custody) of each spouse at the time of hearing. C. After making these determinations, the trial court must then determine whether the spouse seeking alimony has a demonstrated need for financial contribution from the other spouse in order to maintain the standard of living of the spouse seeking alimony in the manner to which that spouse became accustomed during the last several years prior to separation. This would entail considering what reasonable expenses the party seeking alimony has, bearing in mind the family unit's accustomed standard of living. D. The financial worth or "estate" of both spouses must also be considered by the trial court in determining which spouse is the dependent spouse. We do not think, however, that usage of the word "estate" implies a legislative intent that a spouse seeking alimony who has an estate sufficient to maintain that spouse in the manner to which he or she is accustomed, through estate depletion, is disqualified as a dependent spouse. Such an interpretation would be incongruous with a statutory emphasis on "earnings," "earning capacity," and "accustomed standard of living." It would also be inconsistent with plain common sense. If the spouse seeking alimony is denied alimony because he or she has an estate which can be spent away to maintain his or her standard of living, that spouse may soon have no earnings or earning capacity and therefore no way to maintain any standard of living. * * * * * * E. We further note that G.S. 50-16.1(3), read in pari materia with G.S. 50-16.5, in defining dependency, provides for a trial court's consideration of "other facts of the particular case" when awarding alimony. Under this statutory rubric, we feel that consideration should be given to the length of a marriage and the contribution each party has made to the financial status of the family over the years.

299 N.C. at 182-185, 261 S.E.2d at 855-857.

Applying these principles to the present case, it is apparent from the findings of fact and conclusions of law made that the trial court did consider the standard of living of the parties during the marriage and did make findings as to their earnings as of the time of hearing. However, read together, Finding of Fact No. 23, "[t]hat the Defendant's income from his personal endeavors for the year 1977 is very significantly *632 lower than same has been in the past" and Finding of Fact No. 47, "[T]hat Plaintiff is unable to continue to maintain her accustomed station in life and to support herself without assistance from the Defendant" (emphasis added), render it apparent that the trial court disregarded defendant-husband's own inability to maintain the station in life to which he was formerly accustomed. That the trial court did so is also apparent from that portion of the Court's Conclusion of Law No. 6 stating that "[p]laintiff is entitled to recover alimony without divorce of Defendant in an amount reasonably necessary to provide Plaintiff's maintenance and support in her accustomed station in life. (emphasis added.)" The court made no finding, and the evidence would support none, that defendant-husband deliberately depressed his income in an effort to avoid his obligations. Cf., Beall v. Beall, 290 N.C. 669, 228 S.E.2d 407 (1976). In the absence of such a finding, the principle which governed the application of the law to the facts in Williams, that the accustomed standard of living of the parties measures the needs of the wife in determining dependency, acquires less importance in the present case, the more important principle here being "the present earnings and prospective earning capacity . . . of each spouse at the time of hearing." Williams, 299 N.C. at 183, 261 S.E.2d at 856. To find on the one hand that defendant-husband's income "is very significantly lower than same has been in the past" and to find on the other that "[p]laintiff is unable to continue to maintain her accustomed station in life", and based thereon to conclude as a matter of law that plaintiff-wife is the "dependent spouse" entitled to support, has the effect of imposing an onerous duty upon defendant-husband to continue to provide his spouse with a style of life which he himself is no longer able to enjoy.

We are, of course, aware that the Court in Williams referred to the question of fault in the marital separation and stated that, where the dissolution of the family as an economic unit works hardship on both parties, "the burden of contending with diminished assets should, in all fairness, fall on the party primarily responsible . .." 299 N.C. at 188, 261 S.E.2d at 858, 859. We do not, however, construe that language to mandate the conclusion that a party at fault is a "supporting spouse" without regard to the possibility that he or she must now endure a diminished standard of living because of reduced earnings. Thus, although the pre-existing standard of living is certainly a significant factor in determining dependency, the present earnings, earning capacity, reasonable expenses and other conditions of each party which may have modified that standard certainly must be taken into account.

We also find error in the court's award of attorney fees. "The clear and unambiguous language of G.S. 50-16.3 and 16.4 requires that to receive attorney's fees in an alimony case it must be determined that (1) the spouse is entitled to the relief demanded; (2) the spouse is a dependent spouse; and (3) the dependent spouse has not sufficient means whereon to subsist during the prosecution of the suit and to defray the necessary expenses thereof." Hudson v. Hudson, 299 N.C. 465, 473, 263 S.E.2d 719, 724 (1980). All three of these determinations must be made in order to support an award of attorney fees. The court in the present case, however, failed to make the third finding. The evidence in the present record would not support such a finding had it been made. It was error to make any award of attorney fees in this case.

The order appealed from is vacated, and the case is remanded for further proceedings not inconsistent herewith and consistent with the guidelines noted in Williams v. Williams.

Vacated and Remanded.

HEDRICK and ERWIN, JJ., concur.