While you may have learned some of these concepts during your equitable distribution trial, anyone seeking to appeal an equitable distribution order should first understand the general equitable distribution framework.  “Equitable distribution” refers to the legal process used to divide marital property, assets, and debts when a married couple divorces.  Note that in North Carolina it is “equitable” distribution, not “equal” distribution.  Property is supposed to be divided fairly, which may or may not mean equally.

The Court must first classify all assets and debts as either marital, separate, or divisible property.  “Marital property” generally includes assets and debts acquired by either spouse during the marriage but before the date of separation. The date of the final divorce decree really doesn’t matter.  

“Separate property” includes property which belongs to only one of the spouses.  Generally, but not always, separate property was owned by that party before the marriage, or it is derivative of property owned by that party before marriage.  Separate property can also arise from gifts or from the active and exclusive efforts of one spouse, although timing is critical.  Finally, “divisible property” includes some but certainly not all changes to the value of marital assets and debts after the date of separation but before the date of distribution.

Once the court has sorted the assets and debts into these three categories, it must distribute the marital and divisible property, while permitting the owner of any separate property to keep that property.  The court begins with the presumption of an equal fifty-fifty division of the total value of the sum of the marital and divisible property and debts.  That is the most common split of assets.  

The court also begins with a presumption that it will divide the assets and debts using “in-kind” distribution.  For example, if the marital estate consists of two cars, some jewelry, and some furniture, one could expect one spouse to get a car and the jewelry while the other spouse gets a car and the furniture, presuming that division gives each party somewhere close to 50% of the value of the marital estate.  Of course an exact split is rarely possible, so the court will then equalize the division by having one spouse pay cash to the other.  This cash payment is called a distributive award.

Classification Errors

One major source of error in equitable distribution orders arises when the court does not classify the asset correctly.  It may seem like classification should be relatively simple, based on the time that the person obtained the property.  Nonetheless, a myriad of rules exist that can make these distinctions more subtle.  For example, if one spouse owns a home before the marriage, and the married couple then lives in the home during the marriage, does the home remain the original spouse’s separate property?  What if the original spouse pays the mortgage on the home using income he earns during the marriage?  What if the other spouse stays in the home after the date of separation and continues to pay the mortgage until the equitable distribution trial?  Some of the rules which apply to these situations are intuitive; some seem completely unfair but nonetheless are controlling.

Errors In The Findings

Another type of error arises when the court decides to depart from some of the presumptions already discussed (like the presumption of a 50-50 split, or the presumption that the marital estate will be divided through in-kind distributions).  In those situations, the court must make findings of fact related to particular factors.  If the court fails to make those findings, then the Court of Appeals will instruct the court to reconsider its order and to make new findings.  The court may also err when it does makes the required findings, but those findings are not based on competent evidence.  

Comprehensive Review

You can quickly see that the division of a marital estate can present a lot of opportunities for the court to make errors.  These opportunities only compound when the estate contains multiple assets and debts, as almost every estate does.  Some assets “jump out” as particularly important, like the valuation and distribution of the marital home.  Other assets and debts may escape notice.  Most people have multiple credit cards, and they may have multiple car loans.  Retirement accounts can accumulate over the years as people pass through different jobs.  One bank may host a whole series of sub-accounts, from checking to money market accounts.  

If a divorcing spouse does not want to “leave money on the table,” then the attorney for their appeal should take each asset and debt, one by one, and examine whether there are any winning arguments for that particular item.  For example, in a recent case handled by this firm, the client initially reached out because she did not feel that the distribution of three or four of the assets and debts had been fair.  By the time this firm reviewed the entire case and briefed it to the Court of Appeals, we had raised thirteen different issues!

Experience Counts 

Appealing an equitable distribution case therefore requires an experienced attorney who has a keen eye for the various rules and exceptions that apply.  Surprisingly, then, potential clients rarely ask these two critical questions when interviewing appellate attorneys for an equitable distribution case:

1. Have you had success before appealing an equitable distribution appeal?
2. When was the last time you handled an equitable distribution appeal?   

Every attorney is going to have his share of wins and loses.  As I often tell clients, even if you’re making lemonade, you have to at least start with some lemons.  No attorney can turn every case into a winner.  Sometimes the facts and evidence simply do not support a win.  Having some wins does show, however, that the attorney knows what it takes to review, develop, and ultimately argue a case when the equitable distribution order contains (arguable) errors.

Having recent experience with equitable distribution appeals helps for two main reasons.  First, the law governing equitable distribution can change significantly, instantly making old arguments based on old cases obsolete.  A significant revision to the controlling statute, N.C.G.S. § 50-20, occurred less than a year ago.  

Second, recent experience provides some assurance that the attorney actively works in this field.  If any attorney claims he can do a great job representing you but hasn’t handled an equitable distribution appeal in ten years, he may simply not know what he’s talking about.  

Example Cases

Potential clients should be careful in setting their expectations about their particular equitable distribution case based on their attorney’s wins in prior cases.  Again, every case differs in its facts, and even the best attorney cannot win every case.  Nonetheless, the following cases handled by this firm give some examples of the sorts of issues which might be raised in your case.

In Dalton v. Dalton, a couple with a fairly typical portfolio of assets, but also with a few rental properties, went through equitable distribution.  This firm represented the Husband on appeal, and raised eight ways in which the trial court erred, including:

(1) incorrectly valuing the marital property interest and divisible property interest of the Davis property;

(2) miscalculating the marital property interest of the Frances property;

(3) incorrectly valuing the divisible property value of the Wildflower property;

(4) incorrectly concluding it could only value the properties based on appraisals;

(5) incorrectly valuing the marital property interest of the Honda Odyssey and failing to calculate and distribute the divisible value;

(6) incorrectly valuing the marital property interest of the Dodge truck and failing to make a finding regarding its divisible value;

(7) incorrectly finding the parties valued Defendant’s Vanguard IRA by agreement;

(8) failing to order an in-kind distribution of assets; and

(9) failing to make findings regarding the costs of liquidating assets in order for Plaintiff to pay the distributive award.

The resulting opinion by the N.C. Court of Appeals reversed and remanded on most of those issues, saving our client a significant amount of money.

Other cases, like Gien v. Gien, have a more limited number of issues.  In that case, this firm argued about the valuation of two business interests which the Husband had acquired.  The Court of Appeals agreed with our argument as to one of the businesses, which resulted in a six-figure win for our client.

Quite recently, this firm won an appeal in Wheeler v Wheeler, an unusual case in that the trial court deviated significantly from the normal 50-50 default division of value.  This firm argued on appeal that the deviation was not supported by the court’s findings of fact, since the court had relied on findings of the Husband’s “wrongdoing” for allegedly committing acts of domestic violence.  Equitable distribution must be based on purely economic factors, not on finding the “good guy” and the “bad guy.”  The Court of Appeals remanded the case to the trial court for new findings and a new division.

Sometimes equitable distribution cases can intersect with other types of law as well.  In Bradley v. Bradley, this firm represented a Wife who had filed for equitable distribution in North Carolina.  The Husband, who lived in New Jersey, wanted the case conducted in New Jersey, where he believed he would get a more favorable result.  The case ultimately became about a legal concept known as personal jurisdiction.  This firm prevailed, and the Wife was able to pursue her claims in her home court here in North Carolina.

The post Equitable Distribution Appeals appeared first on Mark L. Hayes – Appellate Attorney.

“I expect this case to have very little impact on our statute of frauds jurisprudence. Given the unusual facts, this Court’s holding is quite factbound.”

Nonetheless, when interviewed for an article for Law.com, Mark Hayes provided the following explanation for why this case was important:

“In this new economy where baby boomers are having to step in to help their children with financial dealings, they may find themselves obliged to contracts that they never agreed to, and then the bank of landlord starts pursuing the parents unfairly.”

The case involved a young man who engaged a law firm to help him with a lawsuit filed against him as a contractor and home builder. The man’s father participated in some of the communications between the firm and the contractor. When the contractor could not pay the legal bill, the firm turned its collection efforts to the father.

The full article is available HERE although the full text is behind a paywall for subscribers only.

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Most of an appeal consists of preparing and filing written documents. These include the following:

1) The Record is a subset of the court file, organized in a particular way, and it serves as a reference book for the judges as they consider what matters were argued and presented during the trial phase.

2) The Transcript is a word-by-word memorialization of everything that was said during the relevant hearings or trial.

3) The Briefs are the written arguments submitted to the Court which try to convince the Court of the party’s position.

Often, the Court will resolve the case using only these documents. On occasion, however, the three judges assigned to the case will call the lawyers in for Oral Arguments in downtown Raleigh. The clip above is an example of an oral argument. The record, transcript, and briefs had all already been submitted, but the judges wanted to question the attorneys about their arguments. Oral arguments can be quite the challenge! We have no notice of what the judges will ask, and we have to provide answers that are satisfactory to the judges while also “staying on track” with as much of our pre-planned script of arguments as possible.

The clip is from Munn vs. Rose, a case involving the enforcement of a promissory note debt. For the most part, the case involved questions of contractual interpretation, although it also touched on ancillary issues of estate documents like a will.

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Fortunately, the answer is almost always “no.” This may seem counterintuitive; surely if the case goes to an appeal, the legal issues are more complex, and the costs are higher? Ultimately, though, costs come down to one thing: TIME. Trials are extremely time intensive. Discovery can involve a limitless number of requests, answers, interrogatories, etc. It takes a lot of time to draft these documents, and it can take even more time to comply with the ones coming from the opposing party.

Appeals, in contrast, are already a “closed universe.” Everything that will be said has been said, and it can be reduced to a trial transcript. Every exhibit that will be admitted has been admitted; it is all there in the court file. Appeals look backwards only; they assess whether what was actually done at trial was done correctly and in compliance with legal rules and the law.

Appeals therefore do not often require the lawyer-time of a trial. Sure, there are some cases where the trial costs are low and the appeal costs are similar, but this firm more often sees cases on the other extreme, where the appeals costs are perhaps only a tenth of what the trial costs totaled.

Feeling weary of paying legal bills after a long trial? You may be pleasantly surprised that the appeal is a bargain in comparison.

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An equally challenging situation arises when the grandparent and parent are in opposition to one another over custody of a child. This firm recently represented a grandparent who obtained primary custody of their grandchild, with the parents having only visitation rights. Today, the Court of Appeals ruled in favor of the grandparent; the full opinion can be read here: Barber v. Driggers. When a grandparent seeks custody, the court does not only consider whether they can offer a better home environment than the parents. Parents have a constitutionally-protected “paramount status.” This status means that the parent has a superior claim to custody over a non-parent, unless the parent does something non-parental.

The most obvious examples involve a parent who has neglected his child. That is what happened in this Barber v. Driggers. The mother not only raised the question of which home was in the child’s best interests, but she also raised the issue of whether she had forfeited her constitutionally-protected paramount status. Fortunately we were able to successfully argue that the evidence supported the findings that the mother had in fact forfeited that status.

Parents can forfeit their paramount status in other ways, however, which do not involve mistreating the child. The most common way to do this is to place a child in a domestic environment in which the child forms a parent-like bond with a non-parent. A parent who moves in with her parents can forfeit her paramount status as to those grandparents, if the grandparents become parent-figures. Likewise, a parent who has a live-in partner can forfeit her paramount status as to that partner, in which case the court will determine custody as if the parent and non-parent have equal claims on the child.

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I came across this phenomenon first when appealing a case involving a condominium owner’s association (similar to a home owner’s association, or HOA). After we won at the Court of Appeals, the association’s trade group lobbied to change the law to preclude the re-use of the argument I had made in our case.

The next time this firm caused a change in the law was perhaps less dramatic, but it actually has a broader reach. As part of almost every appeal, the appellant must have a transcript of the trial or hearing prepared. Transcripts must be prepared by certified court reporters, most of whom are also working as state employees in the courtroom. Traditionally, an appellate attorney will contact the court reporter who was actually in the courtroom for their proceeding and enter into a contract with that reporter for the transcript. The reporter is paid directly and personally; the State does not receive the payment.

As court reporters began increasing their rates dramatically in recent years, I began exploring hiring my own court reporters (who charge less) and having them work from the courtroom recording. This required the court reporter from the courtroom to turn over the recording of the proceeding. To my unpleasant surprise, many court reporters refused! I invoked the public records law and insisted. These court reporters could not hold hostage these recordings, which are of course state property.

The court reporters must have caught wind of this, because shortly after my public records victory, the law was changed to limit (although not entirely) the release of these recordings. No doubt the court reporters enjoy charging whatever they want without competition.

Why do I bring this up? Because transcript costs in large cases can be multiple thousands of dollars — costs that are passed on to the client. Some attorneys might accept these high costs as the “price of business.” At this law firm, we are always working to keep costs as low as possible for the client.

The post Changing The Law & Keeping Costs Down appeared first on Mark L. Hayes – Appellate Attorney.

In North Carolina, equitable distribution cases are conducted in District Court without a jury. The resulting orders, which divide a couple’s assets after a divorce, are still final judgments which can be appealed.

Equitable distribution orders can have significant financial consequences for those involved. A couple’s residence can represent a large amount of value which, if divided unfairly, create a “loss” of tens or hundreds of thousands of dollars. Retirement and investment accounts, business ownership interests, and other real estate can also present significant values which, if divided incorrectly, give the losing party plenty of reason to appeal. Assets like vehicles, jewelry, and equipment may have lower values, but they can add up.

A court can make a number of different types of errors in equitable distribution cases. First, North Carolina has a presumption that the marital estate will be divided evenly, 50-50. If the court orders an uneven division, it must make particular findings from the evidence to support that decision.

Also, North Carolina has a presumption for an “in-kind” division of the assets. Nothing else withstanding, the court should attempt to equalize the value which each party receives by dividing the assets. The court cannot simply distribute most of the assets to one party and then order that party to pay the other party a distributive award (a cash payoff) to even up the values.

The court also must value the assets based on competent evidence. Did the court rely on a Zillow report that your ex-spouse pulled off the internet? Depending on how that report was presented, a court’s reliance on that report may be misplaced. This is just one example of a valuation which might be challenged.

Equitable distribution orders are also often paired with, or even consolidated with, other claims arising from a divorce. Alimony, post-separation support (or PSS), and child support claims may be resolved in the same hearing but result in distinct orders, or the court may resolve all of the claims in one extensive order. If the court does decide to use separate orders, it is important for a party interested in appealing to make sure that he initiates an appeal for each respective order. If the party waits for all of the claims to be resolved, he may discover that the deadline for appealing some of the orders has passed while he was waiting for a final resolution. This firm can handle all of these types of claims, whether separately or bundled together.

We can provide you with a free consultation about whether the types and values of the assets in your case would make an equitable distribution appeal worth investigating. After we are retained, we will perform a more thorough review to evaluate what assets might be recoverable, the odds of that recovery, and the costs of pursuing that recovery through a full appeal. If those dollar figures make sense, we can move forward; if they do not, then we can withdraw the appeal before additional funds are spent. We are here to answer your questions.

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Our client owns three units in a complex governed by an condominium owner’s association (which functions very similarly to a home owner’s association, or HOA), and he had a dispute with the association about dues and the association’s duty to make repairs to some flood damage. The association eventually filed a foreclosure action against him for failure to pay his dues. On appeal, we had that foreclosure order reversed.

For procedural reasons too complicated to explain in a short blog post, the case was sent back to the Superior Court for a recalculation of our client’s possible liabilities. Given the ledger, it seems entirely perfunctory; the math just did not add up to justify a foreclosure. Nonetheless, to our surprise, the Superior Court entered a new foreclosure order which effectively repeated the errors it had made the first time.

We appealed again, and today we received our second winning opinion in this case. You can read about it HERE. The end of the opinion hints that this repeated foreclosure action, in the face of math that just does not add up, could result in the imposition of sanctions and attorneys fees against the association. This would be a great result for the “little man” who has simply refused to fold, despite the unrelenting litigation directed at him by the association and its law firm. Kudos to our client! We were glad to help.

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This has certainly been true for me as I practice appellate law. I know from talking to prospective clients that appellate lawyers can be few and far between; I’ve spoken with many people who initially assumed that they needed an attorney from their own town or county, but could not find anyone at all. Only when they broadened their search did they locate my practice. Folks don’t realize that all appeals are handled centrally in Raleigh, and so an appellate lawyer can handle a case originating from most anywhere across the state.

Those of us who practice appellate law, therefore, tend to know one another. Maintaining professionalism and basic courtesy enables us to oppose one another on one day and work together the next. I pride myself on the fact that on multiple occasions, immediately after finishing a case opposite another attorney, that attorney has asked me to assist him or her on their next case. This is probably the lawyer version of “it takes one to know one.” But these referrals don’t only mean that the other attorneys respect my legal ability. It also means that they have found me to be an honorable and trustworthy person.

Nothing makes me appreciate these professional relationships, however, more than an attorney who does not exhibit courtesy and accommodation. This happened to me recently — an attorney whose name I have known for years, and who I’m sure has a wealth of knowledge about legal matters, made an appearance for the other side. He has turned out to be particular, rude, and demanding. When I’m too busy to take a case, I’ll often refer the client out to another appellate attorney. After this experience, I’ll never do that with this particular person. In the end, his lack of professionalism is only hurting his own practice. That wouldn’t be so unfair, except for the fact that I can’t imagine he’s any nicer to his own clients. My advice for any prospective client is to check to see what an attorney’s reputation is beyond just their legal skills. An ounce of niceness will not only make the representation more pleasant, but it will probably mean that your attorney can work more effectively with his peers.

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This is obviously a vast topic, but I wanted to highlight a couple of points which are well articulated in Linker v. Linker v. Boling, 291 N.C. App. 343, 895 S.E.2d 620 (2023). First, there is no “automatic” transfer of custody from the deceased parent to the surviving parent. Certainly the surviving parent has a “paramount status” which will give him or her the inside track on taking over custody, but that position is not unassailable. Even unrelated parties can have the standing to pursue custody of the child over the surviving parent, in some circumstances. Further, grandparents have particular status in these situations to obtain “visitation” or custody (these terms are sometimes synonymous and sometimes not). Their status is not as high as that of the parent (usually) but they do have options that non-grandparents do not.

Finally, some of these alternatives depend on the existence of a pending custody action, which means that the dying parent may wish to initiate a custody proceeding even if she or she knows that she will not survive to see it to the end. Grandparents in particular can intervene more easily into a pending case than they can if no case has been filed. Any parent in this situation should therefore seriously consider consulting with an attorney before they pass away.

Regardless of whether your case involves a dying parent, though, the issue of grandparents and parents fighting for custody of a child is not a rare one. If you are the party to such a custody action and receive a custody order that you are dissatisfied with, please reach out to this firm about an appeal. We have dealt with this sort of case on multiple occasions.

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