Stanley v. Stanley

454 S.E.2d 701 (1995)

Fusha Mae STANLEY, Plaintiff, v. Bill STANLEY, Defendant.

No. 9424DC522.

Court of Appeals of North Carolina.

March 21, 1995.

*703 Norris & Peterson, P.A., by Allen J. Peterson, Burnsville, for defendant-appellant.

No brief, for plaintiff-appellee.

ARNOLD, Chief Judge.

Defendant presents three arguments on appeal. He first argues the trial court erred in awarding three years child support without evidence or findings of fact reflecting actual past expenditures in that amount. This Court addressed a similar argument in Lawrence v. Tise, 107 N.C.App. 140, 419 S.E.2d 176 (1992). In Lawrence, appellant contended the trial court erred in applying the child support guidelines to determine the non-custodial parent's retroactive child support obligation. We agreed, stating that "[r]etroactive child support is based on the non-custodial parent's share of the reasonable actual expenditures made by the custodial parent on behalf of the child." Id. at 151, 419 S.E.2d at 183. Rather than focusing on what the non-custodial parent should have paid under the guidelines, the trial court must focus on the "amount of monies actually expended by the custodial parent on the child." Id.

In this case, the judgment clearly shows the trial court based its award on the child support guidelines, rather than on reasonable actual expenditures. This was incorrect. On remand, the trial court must calculate defendant's share of the monies actually expended by plaintiff for the care of the child during the relevant period. In doing so, the "trial court must make specific factual findings to support" its award. See Savani v. Savani, 102 N.C.App. 496, 501, 403 S.E.2d 900, 903 (1991).

Defendant next argues the trial court erred when it awarded $23,000.00 to plaintiff without determining (1) whether the property was marital, (2) whether an even distribution was equitable, (3) what the fair market value of the property was, and (4) the effect of the factors in N.C.Gen.Stat. § 50-20(c) (1987). He contends the trial court's failure to make these determinations constitutes reversible error.

Any equitable distribution action involves the following analysis:

The trial judge is required to conduct a three-stage analysis in order to equitably distribute the marital assets. He must first ascertain upon appropriate findings of fact, what is marital property; then determine the net market value of the marital property as of the date of separation; and finally, make an equitable distribution between the parties. The marital property is to be distributed equally, unless the court determines equal is not equitable.

Willis v. Willis, 86 N.C.App. 546, 550, 358 S.E.2d 571, 573 (1987) (citations omitted); see also Nix v. Nix, 80 N.C.App. 110, 341 S.E.2d 116 (1986). In this case, the judgment does not reflect that the trial court classified the property as marital or separate and the parties made no stipulations regarding classification. Classification was hotly contested by each party and complicated by the sale of defendant's separate property and subsequent use of those funds. Referring to the statutory definitions of separate and marital property, our case law, and evidence presented by the parties, the trial court must classify the property on remand. In doing so, the "[c]lassification of property must be supported by ... appropriate findings of fact." McIver v. McIver, 92 N.C.App. 116, 127, 374 S.E.2d 144, 151 (1988).

After classifying the property, the court must determine the net value of all marital property as of the date of separation. See Willis v. Willis, 85 N.C.App. 708, 355 S.E.2d 828 (1987). The judgment does not reflect that the trial court performed this vital step. In fact, the findings are silent on *704 valuation. When arriving at a value, "[t]he trial court must make findings of fact, based upon competent evidence, to support its conclusions." Nix, 80 N.C.App. at 115, 341 S.E.2d at 119.

Because this matter must be remanded, we do not find it necessary to address defendant's remaining contentions under this argument. However, we strongly urge the trial court to consider all pertinent factors presented by the parties.

Finally, defendant argues the trial court erred in failing to consider the effect of the 1980 quitclaim deed. Although he does not suggest what effect the deed should have, he argues that the court should have considered it in making its distribution.

In Beroth v. Beroth, 87 N.C.App. 93, 359 S.E.2d 512, disc. review denied, 321 N.C. 296, 362 S.E.2d 778 (1987), the trial court held a hearing to determine the effect of six quitclaim deeds on the equitable distribution action. The deeds, which applied to land formerly owned by the parties as tenants by the entireties, had been executed by the plaintiff one year before the parties separated. Id. Defendant argued the properties were not marital because the tenancy by entirety was dissolved by the quitclaim deeds. Id. The Court disagreed, stating that because the deeds were given to him before separation or during the marriage they were ipso facto marital property. Id. Furthermore, the Court made clear that quitclaim deeds did not have the effect of a release or separation agreement. Id. It stated that the circumstances of the case were not "controlled by G.S. 52-10, which concerns contracts and releases between husband and wife" as "there is a profound distinction between a conveyance and a contract or release." Id. at 94, 359 S.E.2d at 513.

The quitclaim deed, executed after the parties separated, did not serve to withdraw the property from the marital estate, nor should it affect the distribution. In any equitable distribution action the trial court works with property existing at the date of separation. Here, the quitclaim deed had not yet been executed and the property was titled in both names on the date of separation.

Because of errors in both the child support and equitable distribution portions of the judgment, this case must be reversed and remanded. On remand, the trial court should make more detailed findings and, if necessary, gather additional evidence.

Reversed and remanded.

JOHNSON and MARK D. MARTIN, JJ., concur.