North Carolina Divorce Lawyers Blog
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Equitable Distribution Findings on Remand

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Foxx v. Foxx, 2022-NCCOA-223 (5 April 2022) (unpublished).

Some statutes and case laws in North Carolina have a time component. In modifications of child support and custody, the trial court is sometimes required to make comparisons between the old facts and circumstances with the current ones in order to find whether there has been a substantial change in circumstances. Sometimes the old facts and circumstances just don’t exist because the prior order was a consent order. In these cases, trial courts ought to make findings about the facts in play at the time of the prior order, so as to make acceptable comparisons. In equitable distribution, one such statute asks the court to compare the income and estates of the parties at the time of the division of property. Again, it asks for a comparison at a specific point in time. Below is a case where the trial court did not make such comparison.

  • Facts: Defendant and Plaintiff were owners of a real estate appraisal business. Defendant also had some form of employment with the City of Lincolnton, where he had a pending workers compensation and personal injury claim. The parties separated before the conclusion of Defendant’s claims, but he eventually settled both claims and received some funds. Also after separation, Plaintiff received distributions from the appraisal business for her work. This property was not correctly addressed in the parties’ equitable distribution order, so the Court of Appeals remanded and asked for more findings. The trial court elected not to receive new evidence but rather reevaluated those properties and adjusted the percentage of distribution. The court also did not make new findings of fact to explain the change in percentage. Defendant appealed.

 

  • Issue: Was the trial court in error by failing to make findings of fact to explain their reason for changing the percentage?

 

  • Holding:

 

  • Rationale: There exist twelve factors for determining whether the court will depart from a 50/50 split in property. While the trial court has discretion in how they weigh each factor, it must make findings to show that it correctly applied the law to the facts. Put another way, the trial court must give more than due regard to those factors and explain in some form how they arrived at the conclusion. It is important because the appellate court will need these facts to review whether the trial court applied the law correctly. In this case, only one additional finding was made, which was a bare assertation that the trial court considered the factor but gave no indication on how this affected their conclusion. This is significant in light of a factor that required the trial court to make a comparison of estates and income at the time of division. Since the previous order was entered in 2018, and the new one entered in 2021, the lack of findings about the estates in 2021 was especially glaring. This 2021 order was vacated.

 

  • Lessons and Observations: This opinion did not discuss it, but the case it cites, Chance v. Henderson, 134 N.C. App. 657, 518 S.E.2d 780 (1999), discusses the doctrine of ratification and estoppel from challenging an Order that was entered when a party withdrew consent beforehand. Had Plaintiff acted consistently with the terms agreed to in 2017, would they have been estopped from withdrawing their consent? If the agreement were reduced to writing and entered by the court, and Plaintiff then acted consistently with it, this leaves a serious challenge. When an order is entered, parties are under pressure to comply with it or face consequences such as contempt. One assumes this will always lead to ratification, and the truth of that may lie with the timing. If a notice of appeal is immediate then time for ratification, in the context of following an Order, may be explained away.