Plaintiff Wayne Morgan Miller ("Husband") appeals from several orders entered by the district court related to his divorce from defendant Cynthia Bailey Miller ("Wife"). Husband raises both procedural and substantive issues with the trial court's equitable distribution order. Although the trial court properly entered its order vacating the divorce judgment under Rule 60(b) and therefore had jurisdiction over the equitable distribution claims, we remand for the trial court to address substantive issues contained in the equitable distribution order itself.
The parties were married on 4 July 1983 and had no children. On 27 July 2011, Wife filed her complaint for divorce from bed and board and equitable distribution; the parties were still living together at that time. Husband filed his answer on 23 September 2011, which alleged in part that "[n]o facts exist to justify an unequal division of marital property." His answer also alleged that the parties were "not living separate and apart." Wife filed a motion to amend her complaint, and after the trial court granted the motion, Wife filed her amendment on 12 October 2011, adding detailed factual allegations to the fault grounds of her divorce from bed and board claim. On 3 January 2012, the trial court began the hearing on Wife's claim for divorce from bed and board. That same day, a "Memorandum of Judgment/Order" was apparently entered without prejudice which granted Wife exclusive possession of the marital home, prohibited the parties from disposing of personal property, and provided that "[t]his matter is continued until January 23, 2012".
In the divorce from bed and board order, the trial court also found that Wife had found evidence of Husband's affair at their Virginia residence, including a used condom, an earring, and "lips painted with lipstick on the bathroom mirror [and] the words `Love You' underneath them." The trial court also found that Husband had been asked "whether he recently acquired a Virginia driver's license, and he falsely said `no' under oath." Husband had also registered a vehicle in Virginia, using a Virginia address, although he had been living in North Carolina since "as early as June of 2010." He also "continued to have his ex-girlfriend of 26 years ago as a beneficiary on his life insurance policy."
A series of motions, countermotions, and orders arising from disputes regarding various items of personal property and Husband's move out of the marital home followed. The parties finally began living separate and apart on 21 March 2012. On 16 April 2012, the trial court entered an order appointing a referee to inventory the parties' marital and separate personal property. In addition, on the same date, the trial court entered a "Consent Order to Add Supplemental Pleading" which stated in relevant part as follows:
The parties engaged in extensive discovery related to equitable distribution, the referee's report was filed, and both parties filed various motions regarding discovery and valuation of property, which led to the trial court entering several orders based on these motions. On 12 June 2012, Husband filed a motion for interim distribution, requesting sale of the marital home, as well as distribution of various items of personal property to him. On 3 December 2012, the trial court apparently entered a consent order on a "Memorandum of Judgment/Order" form in which the parties agreed that the fair market value of the marital home as of the date of separation was $250,173.00; they also agreed that the fair market value of the Virginia real property as of the date of separation was $87,200.00.
On 22 March 2013, Husband filed a complaint for absolute divorce. Wife filed a motion for extension of time to answer. Husband filed a motion for summary judgment on 22 April 2013, alleging that "there is no genuine issue of a material fact and [Husband] is entitled to an absolute divorce as a matter of law." Husband's motion also noted: "In addition, [Husband] requests that the Court take judicial notice of the entire files in those actions between the same parties hereto being 12 CVD 288, and 11 CVD 701."
On 3 June 2013, Husband filed a motion to continue the equitable distribution trial scheduled for the next day and a motion for the trial judge to be recused on the basis that Husband thought the judge was unable to "complete the proceedings in a fair and impartial manner." The trial court denied the motions but the trial was continued to 24 June 2013 after Husband's counsel was granted leave to withdraw from the case. On 24 June 2013, Husband's new counsel appeared but the trial was again continued.
On 1 July 2013, Husband's new counsel made an oral motion to amend his pleadings to seek an unequal distribution in Husband's favor; Wife did not oppose this motion and the trial court entered an order allowing it on 19 July 2013. But on 5 August 2013, Husband's legal strategy changed course and he filed a motion to dismiss Wife's equitable distribution claim for lack of subject matter jurisdiction, since the parties were not yet separated when the claim was filed. Husband alleged that he had not counterclaimed for equitable distribution and that the divorce from bed and board action in which Wife filed her claim was resolved on 15 March 2012 upon entry of the order granting divorce from bed and board. He also alleged that Wife had not filed any supplemental pleadings containing an equitable distribution claim and that the parties had already been divorced, ending Wife's ability to bring a claim for equitable distribution.
Wife sought to preserve her equitable distribution claim on all fronts. In the divorce from bed and board case, she filed an affidavit opposing Husband's motion to dismiss her equitable distribution claim; in the absolute divorce case, she filed a Rule 60(b) motion asking the district court to set aside the absolute divorce judgment and allow her to file a new answer including a counterclaim for equitable distribution in the divorce case. The district court held a hearing on the motions filed by both parties on 23 October 2013 and rendered a ruling in open court, with both parties present, declaring that the court was granting Wife's motion to set aside the divorce judgment and allowing her to file a counterclaim for equitable distribution and dismissing Husband's motion to dismiss Wife's equitable distribution claim in the divorce from bed and board case.
Before the court filed a written order based upon its rendition of the ruling on 23 October 2013, Husband was remarried, on 28 October 2013, in Virginia. On 10 December 2013, Husband filed a motion to re-open evidence, noting that at the time of the hearing on 23 October 2013, he had not re-married, but that subsequent to the hearing and prior to the entry of an order vacating the divorce judgment, he had remarried. Thus, Husband argued that he "should be afforded an opportunity to present evidence to [the district court] as to his remarriage since the entry of an order vacating his divorce judgment would not be in any way equitable and would create great legal hardship for him, additionally the entry of such order would interfere with his right to remarry." Further, Husband alleged that "[t]he entry of an order vacating the divorce judgment is unnecessary given that [the district court] is prepared to enter an order dismissing [Husband's] motion to dismiss equitable distribution in 11 CVD 701 for lack of subject matter jurisdiction, and thus [Wife] will not be prejudiced."
Husband also submitted his requested findings of fact for the court's "order vacating the divorce judgment entered in this action[,]" including that he began living with Dorothy Virginia Brinkley in January 2013 and that they then married on 28 October 2013. He noted that when he heard the trial court's
The trial court held a hearing on 23 January 2014 regarding Husband's motion to reopen evidence. Husband testified that he married Ms. Brinkley five days after the 23 October 2013 hearing, on 28 October 2013, and they had created and signed a prenuptial agreement during the time between the hearing and the marriage.
Near the end of the hearing, after Wife's counsel noted that he had never faced this situation, the court agreed, noting: "I don't think any human being ever has, so we're all sailing uncharted seas here." In trying to figure out how to address the motions at issue, Husband's counsel argued that the court needed "to make findings about the new evidence that [it] heard and it all needs to be embodied in one order, and you can say that despite, uh it-it being equitable relief that, in your discretion, you don't think [Husband] having two wives is a problem."
The trial court replied:
After more back and forth with Husband's trial counsel, the Court reiterated its position:
On 17 March 2014, the court entered its order granting Wife's Rule 60(b) motion and setting aside the 22 May 2013 divorce judgment. In its very long and detailed order, the court addressed much of the procedural history of the various cases as summarized above and found that the hearing had been held on the motion on 23 October 2013 and before Wife's counsel completed drafting an order, Husband "proceeded to get remarried[.]" The order granting Wife's 60(b) motion included numerous findings, including that:
(Emphasis in original).
In addition, while the order noted that Wife initially filed her request for equitable distribution prematurely, the court also found that "[i]n the Consent Order to Add Supplemental Pleading, [Husband] expressly joined in the request for an equitable distribution[.]" The order includes detailed findings addressing all of the many "Actions Taken in the Companion Court Action by Both Parties in Pursuit of their Respective Equitable Distribution Claims" and then finds:
The court found that Wife "reasonably relied" on Husband's statements and actions and reasonably believed "that both parties had valid equitable distribution claims pending[.]" Additionally, the trial court concluded in its findings that the parties had a "mutual belief" that they both had claims for equitable distribution pending at the time the trial court entered its absolute divorce decree.
The trial court also explicitly described its concerns regarding whether its ruling dismissing Husband's motion in the divorce from bed and board action would be sufficient to protect Wife's claim:
The court also entered its order denying Husband's 12(b)(1) motion to dismiss Wife's equitable distribution claim in the divorce from bed and board action on 17 March 2014. In that even more extensive order, the trial court made the following relevant conclusions of law:
On or about 7 April 2014, Wife filed an amended or supplemental answer to Husband's complaint for absolute divorce including a counterclaim for equitable distribution and a motion to consolidate the divorce claim with the 2011 action for divorce from bed and board. Husband filed a motion to dismiss Wife's counterclaim for equitable distribution, arguing that "he believes that the Court erred in vacating the divorce judgment in this action and that the counterclaim is being filed after the parties were properly divorced." Husband also noted that he "additionally opposes [Wife's] claim for an unequal distribution in her favor." The trial court filed an order granting Wife's motion and denying Husband's motion to dismiss on 16 July 2014, although it appears the order was never signed by the judge.
The equitable distribution trial began on 29 September 2014 and was held over the course of four nonconsecutive days before coming to conclusion over a year later, on 17 November 2015. On 19 March 2015, the court made a partial ruling, and the trial court entered its judgment and order granting Husband an absolute divorce from Wife and dissolving the marriage. The order noted that the trial court "shall retain jurisdiction over the matter of equitable distribution in order to enter and enforce any final orders in these consolidated proceedings[.]" That same date, the trial court entered several "Court Order[s] Acceptable for Processing" ("COAP") for both parties' employee annuities and former spouse survivor annuities, addressing distribution of the retirement benefits of both parties. Husband filed a motion requesting findings of fact and modifications to the court's proposed equitable distribution judgment and order on 17 September 2015.
The district court entered its equitable distribution judgment and order on 17 November 2015. The court found that as of the date of separation and presently Husband and Wife were the joint owners of marital property in Siler City, North Carolina ("the marital home"). After noting that both parties testified that they did not want the property distributed to them, the court found that the marital home "should be listed for sale . . . within sixty (60) days after the entry of this Order at a price agreed upon by the parties, or in the event the parties are unable to agree, a price recommended by the realtor." The proceeds were to be divided equally between the parties. The court similarly found the parties to be joint owners of seven acres of land in Virginia (the "Virginia Property") and ordered that this marital property be sold as well, with the proceeds again split equally between the parties. If either property had not sold before the expiration of the six month listing agreement, the parties were to return to court for further review.
The court also found that "[a]s of the date of separation [Husband] and Randy A. Winkleman were parties to a Timber Agreement dated November 20, 2009, which entitled [Husband] to receive fifty percent of the proceeds from timbering certain property located in . . . Pennsylvania." The court concluded that the Timber Agreement was marital property and that it should be distributed to Husband at its current value of $5,000.00.
In addition, the trial court's order adopted the COAP's, which divided the monthly retirement benefits each party receives under the Civil Service Retirement System (CSRS) equally and requires Husband to pay Wife $13,009.50, one-half of the difference between the monthly CSRS annuity payments received by the parties from the date of separation through 30 September 2014. In addition, the court ordered Husband to pay Wife a distributive award of $13,462.00 within 30 days of the entry of the order.
Finally, the trial court classified Husband's 2011 Suburban vehicle as his separate property with a value of $49,000.00 and found that both it and the secured debt attached to it of $64,638.82 were acquired after Wife filed her action for divorce from bed and board and not for the joint benefit of the parties. Wife filed a motion on 3 December 2015 to amend and correct issues related to the judgment and order and for reconsideration of all of the issues raised on 17 November 2015. Husband timely appealed the equitable distribution judgment and order to this Court.
Husband filed a motion to amend the record on appeal on or about 15 July 2016, claiming that he "inadvertently failed to include" his notices of appeal from: (1) the denial of his Rule 12(b)(1) motion to dismiss, filed 28 March 2014, (2) the order granting Wife Rule 60(b) relief, filed 18 March 2014, and (3) orders granting Wife's motion to consolidate and strike and denying Husband's motion to dismiss, filed 29 July 2014. On 18 August 2016, Wife filed a motion to amend the record on appeal, asking to include: (1) a copy of the 11 July 2016 OPM notice regarding the award of monthly annuity and survivor annuity; and (2) a copy of Husband's 22 July 2016 COAP filing, a copy of the sanitized order for the record redacting certain personal and private information, and a copy of the un-redacted version for the file. By separate order, we have granted both motions to amend the record.
On appeal, Husband raises multiple issues, both procedural and substantive, with the trial court's equitable distribution order. We first address the procedural concerns and then address some of the substantive issues.
I. Subject Matter Jurisdiction Over Equitable Distribution Claims
First, Husband argues that the trial court erred both by denying his motion to dismiss the equitable distribution claim Wife filed prior to the date of separation for lack of subject matter jurisdiction and its order vacating the divorce judgment pursuant to Rules 60(b)(1), (3), and (6), thus allowing Wife the opportunity to file a new equitable distribution claim after separation and prior to entry of the absolute divorce. Essentially, the trial court entered these two orders which have the same practical effect — preservation of Wife's equitable distribution claim — by two different legal routes, in full recognition of jurisdictional problems caused by the filing of Wife's equitable distribution claim before the parties had separated. Thus, Wife's equitable distribution claim must be dismissed only if both orders were in error and reversed. We will therefore address only the order granting Wife's Rule 60 motion since it is dispositive.
"Rule 60(b) has been described as a grand reservoir of equitable power to do justice in a particular case. The North Carolina Supreme Court has stated that its broad language gives the court ample power to vacate judgments whenever such action is appropriate to accomplish justice." Jim Walter Homes, Inc. v. Peartree, 28 N.C. App. 709, 712, 222 S.E.2d 706, 708 (1976) (citations, quotation marks, and ellipses omitted). "Our courts have long held that a Rule 60(b) motion is addressed to the sound discretion of the trial court and its ruling will not be disturbed absent an abuse of that discretion." Venters v. Albritton, 184 N.C. App. 230, 234, 645 S.E.2d 839, 842 (2007) (citations and quotation marks omitted). Under Rule 60(b)(6), the trial court "may relieve a party or his legal representative from a final judgment, order, or proceeding for . . . [a]ny other reason justifying relief from the operation of the judgment." N.C. R. Civ. P. 60(b)(6). "The grounds for setting aside judgment pursuant to Rule 60(b)(6) are equitable in nature. What constitutes cause to set aside judgment pursuant to Rule 60(b)(6) is determined by whether (1) extraordinary circumstances exist; and (2) whether the action is necessary to accomplish justice." Trivette v. Trivette, 162 N.C. App. 55, 63, 590 S.E.2d 298, 304 (2004) (citations omitted).
Husband relies in part on Howell v. Howell, 321 N.C. 87, 91, 361 S.E.2d 585, 588 (1987), where our Supreme Court reversed an order by this Court upholding a trial court order granting the defendant's motion to set aside the effect of a divorce judgment "to the extent that it barred her claim for equitable distribution[.]" The Supreme Court noted in Howell, however, that it disagreed with this Court "on a narrow ground." Id. Specifically, our Supreme Court stated:
Id. at 91-92, 361 S.E.2d at 588 (footnote omitted).
Husband claims that the Howell Court "implicitly concluded that the failure to timely file an equitable distribution claim was not an extraordinary circumstance." The Supreme Court's own language in Howell, though, refutes this argument, as the Court specifically stated that it was reversing this Court "on a narrow ground." Id. at 91, 361 S.E.2d at 588. The Howell decision is based upon the fact that the defendant, Ms. Howell, asked for relief from an effect of a divorce judgment while leaving the divorce decree itself intact. Id. at 92, 361 S.E.2d at 588. The Supreme Court never addressed whether failure to file a timely equitable distribution claim was or was not an extraordinary circumstance.
Here, by contrast, the trial court completely vacated the divorce decree, using its discretion under Rule 60(b) and explicitly weighing the equities of the situation to both parties. Husband even alleged in his motion to reopen the evidence — so that he could present evidence of his remarriage days after the court's rendition of its ruling — that "[t]he entry of an order vacating the divorce judgment is unnecessary given that [the district court] is prepared to enter an order dismissing [Husband's] motion to dismiss equitable distribution in 11 CVD 701 for lack of subject matter jurisdiction, and thus [Wife] will not be prejudiced." (Emphasis added). He then appealed from that very ruling with the obvious goal of prejudicing Wife by eliminating her equitable distribution claim. Fortunately, the trial court recognized Husband's legal strategy of setting up a jurisdictional defect which he could then exploit on appeal, since a lack of subject matter jurisdiction cannot be waived and can be raised at any time.
Furthermore, Husband's requested findings and statements at the hearing show that he was well aware that the trial court had decided to vacate the divorce judgment and would be entering an order accordingly when he arranged to have a prenuptial agreement prepared and signed immediately and got married only five days later. His calculated actions, which were obviously intended to eliminate Wife's equitable distribution claim, created the predicament of bigamy that he now claims to face, and the trial court rightfully concluded that "extraordinary circumstances exist" in this case and that vacating the divorce decree was an action "necessary to accomplish justice." Trivette, 162 N.C. App. at 63, 590 S.E.2d at 304. Since we have concluded the trial court was well within its discretion to enter its decree setting aside the divorce judgment with Rule 60(b), the trial court had subject matter jurisdiction over Wife's equitable distribution counterclaim as stated in her amended answer to the divorce complaint.
II. In-Kind Distribution and Distributive Awards
Next, Husband argues that the trial court erred by failing to provide for an in-kind distribution and ordering the sale of real property regarding the marital home and the Virginia property. We agree.
In this case, the trial court's equitable distribution order contained the following findings of fact regarding the sale of the marital home and the Virginia Property and the payment of a distributive award:
On the Spreadsheet attached as Exhibit 4 of the order, the trial court did not list a value for the marital home or the Virginia property but instead listed "50% of Net Proceeds" in the column for each party. Likewise, instead of finding a value for the parties' retirement plans, the trial court stated "Equal Division — CSRS COAP" in the column for each party. Thus, the total value of the marital estate listed on the spreadsheet includes only those items of property which were assigned a value on that spreadsheet, so that total value excludes the four largest marital assets. The trial court determined the distributive award based upon that partial "total" value of the marital estate.
In addition, the trial court made the following conclusions of law:
"Under [N.C. Gen. Stat. § 50-20(c)], equitable distribution is a three-step process; the trial court must (1) determine what is marital and divisible property; (2) find the net value of the property; and (3) make an equitable distribution of that property." Robinson v. Robinson, 210 N.C. App. 319, 322, 707 S.E.2d 785, 789 (2011) (citation, quotation marks, and brackets omitted). In order to properly conduct this process, it is clear that the second step is for the trial court to actually place a value on the property to be distributed. See, e.g., Thomas v. Thomas, 102 N.C. App. 127, 129, 401 S.E.2d 367, 368 (1991) ("By appointing commissioners to sell the property and divide the net proceeds after paying expenses and costs, the trial judge did not satisfy the requirement of the statute that the judge must place a value on the property."); Soares v. Soares, 86 N.C. App. 369, 371-72, 357 S.E.2d 418, 419 (1987) (holding trial court erred by ordering sale of marital home for not less than the appraised value without first determining its value.).
The trial court's role is to classify, value, and distribute property, not simply to order that it be sold. In doing so, "the trial court must consider the property's market value, if any, less the amount of any encumbrance serving to offset or reduce the market value." Robinson, 210 N.C. App. at 323, 707 S.E.2d at 789. Here, the parties had actually stipulated to the values of the marital home and the Virginia Property as of the date of separation and neither was encumbered by a mortgage. The trial court found that neither party wanted the real property, and the record reflects that Wife wanted the property to be sold.
III. Distributional Factors
Next, Husband argues that the trial court erred by failing to make findings and give proper consideration to his evidence of distributional factors. Wife seems to agree, noting that she "is not in disagreement with [Husband] that the Court order of November 17, 2015 lacks Findings of Facts and Conclusions of Law regarding the distributive award."
Britt v. Britt, 168 N.C. App. 198, 204, 606 S.E.2d 910, 914 (2005) (citations, quotation marks, brackets, and ellipses omitted). "[W]hen evidence of a particular distributional factor is introduced, the court must consider the factor and make an appropriate finding of fact with regard to it." Fox v. Fox, 114 N.C. App. 125, 135, 441 S.E.2d 613, 619 (1994); see also Warren v. Warren, 175 N.C. App. 509, 518-19, 623 S.E.2d 800, 806 (2006) (remanded for further findings of fact where evidence offered relating to N.C. Gen. Stat. § 50-20(c)(9), (11a), and (12) but court made no findings regarding those factors). The requirement to make such findings regarding the factors for which evidence is presented "exists regardless whether the trial court ultimately decides to divide the property equally or unequally." Warren, 175 N.C. App. at 518, 623 S.E.2d at 806.
Sauls v. Sauls, 236 N.C. App. 371, 375, 763 S.E.2d 328, 331 (2014) (citations, quotation marks, brackets, and italics omitted).
At trial, the court and Wife's counsel stated the following regarding the distributional factors evidence presented:
The trial court made the following finding — perhaps more properly characterized as a conclusion of law — regarding distribution in its equitable distribution order:
Thus, while the court noted that it "consider[ed] the distributional factors" and concluded that an equal division was equitable, the order does not include sufficient findings about the distributional factors for us to review this conclusion. In addition, the trial court concluded that a distributive award was necessary to equalize the division of the marital and divisible assets of the parties, although that conclusion was based in part upon its erroneous decree that the real properties be sold instead of distributing them. The trial court then concluded:
The order did not identify the distributional factors "we're about to talk about[,]" much less "every distributional factor we've talked about" during the trial, as the trial court correctly noted should be addressed by the order. Those distributional factors are listed in N.C. Gen. Stat. § 50-20(c) (2015). Evidence was presented about several of these factors, most notably the liquidity of the marital estate (N.C. Gen. Stat. § 50-20(c)(9)); Wife's early retirement (N.C. Gen. Stat. § 50-20(c)(12) (catchall provision)); the physical health of the parties (N.C. Gen. Stat. § 50-20(c)(3)); and the "[a]cts of either party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or convert the marital property . . . during the period after separation of the parties and before the time of distribution" (N.C. Gen. Stat. § 50-20(c)(11a)); but the trial court erred by failing to make any findings regarding that evidence. See Warren, 175 N.C. App. at 518, 623 S.E.2d at 806. On remand, the trial court must make findings regarding all distributional factors for which evidence was presented and determine in its discretion whether an equal division is equitable, since the trial court's analysis of this issue may change on remand considering the distribution instead of sale of the real property, as well as other matters addressed on remand.
IV. Timber Agreement
Husband next argues that the trial court's valuation of the Timber Agreement, which was an agreement between plaintiff and his cousin involving timber on land in Pennsylvania that the trial court classified as marital property, was not supported by competent evidence, and Wife seems to agree.
The trial court made the following finding about the Timber Agreement:
The court then concluded that Husband "shall be distributed as his sole and separate property the Timber Agreement and all benefits associated therewith."
Husband is correct that the evidence regarding the Timber Agreement was speculative, at best. The timber in question was on land which the parties had owned during the marriage, but Husband had sold in 2009 to his cousin. Wife testified that she was unaware of the sale until later and that it was done without her signature. Neither party knew exactly what sort of timber was there or how much, although Wife estimated the value to be $10,000.00. The Timber Agreement itself was quite unusual, as noted by the trial court:
In any event, the future value of timber, planted during marriage on marital property but which will not mature until some years in the future, is too speculative to be considered a vested property right for purposes of equitable distribution. See Cobb v. Cobb, 107 N.C. App. 382, 386, 420 S.E.2d 212, 214 (1992) ("In the case at bar, we find that the future value of the timber is more analogous to an option which may be lost as a result of future events. . . . Appellee may never realize the future value of the timber if, for example, the trees are destroyed by fire or insects, or if appellee decides to sell the property or to not cut the trees at all."). This Court concluded in Cobb that the future value of timber that would not mature until many years later should not be considered marital property or a distributional factor, since "characterizing growing trees as a vested property right is far too speculative," and "[an] equitable distribution trial would become overwhelmingly complicated." Id. at 386, 387, 420 S.E.2d at 214, 215. We therefore conclude that the valuation of the Timber Agreement in this case at $5,000.00, which involved timber of an unknown variety, age, and quantity, was not supported by competent evidence.
V. Classification of 2011 Suburban and Debt as Separate Property
Finally, Husband argues that the trial court erred in classifying the 2011 Suburban and debt secured by it as his separate property and debt. Specifically, Husband contends that "[t]he record does not support the Court's finding that the vehicle was not acquired for the joint benefit of the parties and the judgment contains no findings or conclusions indicating that the Defendant rebutted the marital property presumption[.]" Husband also argues that the court below erred because it "apparently believ[ed] that property acquired prior to separation, but after the filing of an action for divorce from bed and board falls outside of the marital property definition."
Here, the trial court valued Husband's 2011 Suburban at $49,000.00 with a secured debt of $64,638.82. The trial court classified it as Husband's separate property and debt. The court's findings include the fact that the Suburban and debt was "acquired/incurred by [Husband] after [Wife] filed the 2011 Proceeding [for divorce from bed and board] and were not acquired/incurred for the joint benefit of the parties."
Although the trial court noted that the Suburban was acquired after Wife filed her claim for divorce from bed and board, the relevant date for classification of property for equitable distribution purposes is the date of separation. See N.C. Gen. Stat. § 50-20(b)(1) (2015) ("`Marital property' means all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of separation of the parties, and presently owned, except property determined to be separate property or divisible property[.]") (emphasis added). Furthermore, "[t]he spouse claiming that the property is separate bears the burden of proof, as under N.C. Gen. Stat. § 50-20(b)(1), it is presumed that all property acquired after the date of marriage and before the date of separation is marital property[.]" Allen v. Allen, 168 N.C. App. 368, 374, 607 S.E.2d 331, 335 (2005) (quotation marks omitted). The presumption may, however, "be rebutted by the greater weight of the evidence." N.C. Gen. Stat. § 50-20(b)(1).
Here, at the equitable distribution hearing, Husband testified that the Suburban was purchased on or about 12 November 2011 while the parties still resided together and that he did not believe the marriage was over when he purchased the vehicle. The date of separation was 21 March 2012. Thus, the Suburban was purchased before the parties were separated and is presumed to be marital property. Although the trial court also heard testimony that Husband purchased the vehicle on his own and financed the vehicle himself, that Wife never drove the vehicle, and that Husband put all 33,000 miles on it, the court made no findings indicating that Wife rebutted the marital property presumption. There was no evidence that Husband purchased the Suburban with separate funds. Based upon the record, it appears that the Suburban and its associated debt should have been classified as marital. On remand, the trial court must clearly make findings to support its classification, valuation, and distribution of the Suburban and its debt. But we note that on remand, the trial court may, in its discretion, also consider the circumstances of Husband's purchase of the Suburban and associated debt he incurred as a factor favoring an unequal distribution in favor of Wife, thus accomplishing the same result in the actual distribution. In other words, the trial court should do the "equity" in equitable distribution in the distribution phase of the order, not in the classification of the property or debt as marital or separate.
If ever there was a case where it was proper for the trial court to use the "grand reservoir of equitable power to do justice in a particular case" under Rule 60(b), this is it. Jim Walter Homes, Inc., 28 N.C. App. at 712, 222 S.E.2d at 708 (citation and quotation marks omitted). We commend the trial court's extensive and detailed orders addressing the facts and equities of this very unusual situation. The trial court acted well within its discretion when it entered a decree vacating the divorce decree under Rule 60(b) and thus had jurisdiction over Wife's equitable distribution claim. We also appreciate the complexity of the case and the difficulty of dealing with all of the issues raised over several years of litigation. But for the reasons noted above, we must reverse the equitable distribution order and remand for the trial court to enter a new equitable distribution order which addresses the substantive issues in a manner consistent with this opinion. On remand, the trial court may in its discretion receive additional evidence limited to the issues of classification, valuation and distribution of property as necessary for preparation of a new equitable distribution order.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
Judges McCULLOUGH and ZACHARY concur.