Davis v. Sineath , 129 N.C. App. 353 ( 1998 )

HORTON, Judge.

Defendant argues the trial court abused its discretion by ordering an unequal division of the marital property and the marital debt. Specifically, she first contends the trial court erred by applying the “source of funds” rule to the marital residence. We disagree.

The division of marital property is a matter within the sound discretion of the trial court, and its judgment will not be disturbed on appeal absent an abuse of that discretion. Johnson v. Johnson, 78 N.C. App. 787, 790, 338 S.E.2d 567, 569-70 (1986). The trial court’s decision that an equal division is not equitable will not be disturbed on appeal unless this Court, upon consideration of the record, can determine that the division has resulted in an obvious miscarriage of justice. Alexander v. Alexander, 68 N.C. App. 548, 552, 315 S.E.2d 772, 775-76 (1984).

In this case, the trial court made findings as to various distributional factors and found the parties did not argue for consideration of any other distributional factors. Defendant did not assign error to the trial court’s findings, and they are therefore binding on appeal. See Anderson Chevrolet/Olds v. Higgins, 57 N.C. App. 650, 653, 292 S.E.2d 159, 161 (1982) (holding if error is not assigned to a finding of fact it is presumed to be supported by competent evidence and is binding on appeal).

The trial court concluded an equal division of the marital property would be inequitable and ordered Bradley Creek be assigned to plaintiff. Defendant argues the trial court improperly applied the “source of funds” rule to reach this conclusion.

Under the “source of funds” rule, “when both the marital and separate estates contribute assets towards the acquisition of property, each estate is entitled to an interest in the property in the ratio its contribution bears to the total investment in the property.” Wade v. Wade, 72 N.C. App. 372, 382, 325 S.E.2d 260, 269, disc. review denied, 313 N.C. 612, 330 S.E.2d 616 (1985). However, when property is titled as a tenancy by the entirety, there is a presumption that any separate property funds used to acquire the property was a gift to the marriage and the property is marital in nature. McLean v. McLean, 323 N.C. 543, 552, 374 S.E.2d 376, 382 (1988).

The trial court properly found Bradley Creek was marital property in accordance with the holding in McLean. However, the trial court concluded Bradley Creek should be distributed to plaintiff based, at least in part, upon its findings that the entire purchase price of Bradley Creek, $607,918.41, came from plaintiffs separate property funds, and during the marriage and after separation plaintiff paid $290,312.81 from his separate property funds for renovations of Bradley Creek. Even though the use of separate property funds to acquire property titled as a tenancy by the entirety creates a presumption of a gift to the marital estate, the use of those funds may properly be considered as a distributional factor. Collins v. Collins, 125 N.C. App. 113, 116, 479 S.E.2d 240, 242, disc. review denied, 346 N.C. 277, 487 S.E.2d 542 (1997). Therefore, the trial court’s conclusion is supported by its findings.

Furthermore, defendant incorrectly argues that plaintiff’s use of his separate property funds to purchase and renovate Bradley Creek was the sole distributional factor relied upon by the trial court to reach its conclusion. The trial court also properly considered as a distributional factor that the marriage lasted only ten months. See N.C. Gen. Stat. § 50-20(c)(3). Defendant has failed to show the trial court abused its discretion by ordering an unequal division of the marital property.

Defendant also contends the trial court erred by assigning her $32,253.78 of marital debt for renovations a contractor had done during the marriage. Defendant paid this amount to the contractor after the date of separation and while she was living at Bradley Creek. The trial court properly considered as a distributional factor that after the date of separation defendant resided in the marital home rent and mortgage free and that the fair market rental value of the property during that time period was $47,500.00. See Burnett v. Burnett, 122 N.C. App. 712, 716, 471 S.E.2d 649, 652 (1996) (holding a party’s exclusive use of the marital residence after separation is a relevant distributional factor that must be considered by the trial court). Defendant has failed to show the trial court abused its discretion by ordering an unequal division of the marital debt.

Finally, defendant also contends the trial court erred by “refusing to give proper consideration to equitable factors” in her favor. When evidence is presented from which the trial court could determine that an equal distribution of the marital property would be inequitable, the trial court must consider all of the distributional factors set out in N.C. Gen. Stat. § 50-20(c) and make sufficient findings as to each factor upon which evidence was offered. Locklear v. Locklear, 92 N.C. App. 299, 305-06, 374 S.E.2d 406, 410 (1988). The able trial court made thorough findings of fact as to each of the distributional factors implicated by the evidence presented by both parties. These findings clearly demonstrate the trial court gave proper consideration to all distributional factors. Defendant’s contention is without merit.

We hold the trial court did not abuse its discretion by ordering an unequal distribution of the marital property and the ordered division did not result in an obvious miscarriage of justice. For these reasons, the order of the trial court must be

Affirmed.

Chief Judge ARNOLD and Judge SMITH concur.