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No Second Guessing the Evidentiary Supported Value of Marital Property

By Sade Knox, Intern, Woodruff Family Law Group

Chafin v. Chafin, 791 S.E.2d 693 (N.C. Ct. App. 2016)

Facts: In late 1988, Plaintiff and Defendant entered into a marriage that lasted about twenty years before the parties separated in June of 2008. During the years of the marriage, Defendant was an owner of a close to non-profiting auto-sales company in North Carolina. The company operated during the marriage up until the date of separation between the parties, which was when the company had dissolved, in 2008. That following year, Plaintiff filed a complaint seeking equitable distribution of the marital and divisible property and provided inventory affidavits listing the assets of the marital home shared by the parties and the company that Defendant owned. The company’s assets mainly included the bank accounts, vehicle inventory, and Cash on Hand. Defendant failed to follow the trial court’s order to serve his equitable distribution inventory affidavit but, later served an affidavit in response to the proposed pretrial order, objecting to Plaintiff’s classification of the company’s assets.

Because of the evidentiary support provided by Plaintiff, the trial court found that the assets in question were marital property and awarded Plaintiff a lump sum that Defendant was required to pay in monthly payments. Though Defendant argued otherwise, the court found that due to Defendant’s income and assets from his employment, he was capable of distributing award to Plaintiff. Defendant went on to file four motions that were denied, but eventually, the court allowed Defendant’s motion to preserve the record in which evidence was offered to show that not all vehicles listed on the pretrial order were on the auto company’s lot on the date of the parties’ separation. Defendant appeals the trial court’s other findings.

Issue: Whether all the mentioned assets of the auto company and the shared home were marital and divisible property and correctly stated.

Answer to Issue: Yes.

Summary of Rationale: All personal and real property acquired by either spouse, during the marriage up until the date of separation is marital property. Defendant, owner of the auto sale company, deemed the company as personal property and the shared home was real property, both of which were acquired by the Defendant during the period of the parties’ marriage, classifying both the company’s assets and the home as marital property.

Defendant argued that there was no competent evidence to prove that the vehicles listed in Plaintiff’s affidavit were owned by him on the separation date. The court notes sufficient evidence provided by Plaintiff, such as her affidavits, which provided information on the vehicles, her testimony of her visit to the lot with Defendant on the date of separation, and the comparable vehicle registry of the company that was consistent with the company’s vehicle purchases to dismiss this argument. In an appellate review for an equitable distribution, the court is not in place to second guess what is or what is not marital property and its value, as long as supportive evidence is provided, and here there is plenty. Accordingly, Defendant’s arguments filed in his challenged motions were again, denied and judgment was affirmed in favor of Plaintiff.

Comments:

With Defendant’s failure to file motions and present arguments in a timely fashion, the court was left without much of a choice, resulting in motions dismissals and rejected arguments. Pursuant to Rule 11, the court may impose a sanction on an attorney, law firm, etc., due to a rule violation. U.S.C.S. Fed. Rules Civ. Proc. R 11.

A sanction is appropriate when a party willfully obstructed or unreasonably delays, or attempts to delay, the discovery proceeding or pending equitable distribution proceedings. N. C. Gen. Stat. § 50-21(e). The court found that not only did Defendant fail to take advantage of his opportunities to repudiate Plaintiff’s evidence, but Defendant also failed to do so within a reasonable time, by waiting until after the equitable distribution hearing to file his motions, without providing prior notice to Plaintiff.

With the proof of Defendant’s conduct being in violation of Rule 11, the order for Rule 11 sanctions against Defendant was proper by the trial court, and the trial court’s judgment of equitable distribution in favor of Plaintiff was affirmed.