                IN THE COURT OF APPEALS OF NORTH CAROLINA

                                   No. COA18-433

                                  Filed: 7 May 2019

Cabarrus County, No. 15 CVD 2160

BARBARA CORRIHER CLEMONS, Plaintiff,

             v.

GEORGE BELL CLEMONS, Defendant.


      Appeal by plaintiff from judgment entered 1 December 2017 by Judge Donna

H. Johnson in District Court, Cabarrus County. Heard in the Court of Appeals 31

October 2018.


      Ferguson, Hayes, Hawkins & Demay, PLLC, by Edwin H. Ferguson, Jr., for
      plaintiff-appellant.

      Jordan Price Wall Gray Jones & Carlton, PLLC, by Lori P. Jones and Hope
      Derby Carmichael, for defendant-appellee.


      STROUD, Judge.


      Wife appeals from an equitable distribution order valuing the “marital portion”

of a townhome she owned prior to marriage at $90,000.00 and distributing it to Wife

and distributing $90,000.00 of marital debt on the same property to her. Because the

parties stipulated in the pretrial order that the townhome was Wife’s separate

property, the trial court erred by classifying part of its value as marital property and

making its distribution based upon this classification and valuation. We reverse and

remand.
                                     CLEMONS V. CLEMONS

                                        Opinion of the Court



                                       I.      Background

       Husband and Wife were married on 6 September 2003 and separated on 21

March 2015. On 2 July 2015, Wife filed a complaint against Husband with claims for

equitable distribution with an unequal division in her favor, postseparation support,

and alimony.1       Husband answered and joined in Wife’s request for equitable

distribution but requested an unequal division in his favor. A pretrial order was

entered on 13 November 2017 with detailed schedules of property and issues in

contention. In this order, as relevant to the issues on appeal, Husband and Wife

stipulated that the “Townhome” with a “Net Value” of “186,000.00” was the separate

property of Wife.2 At trial, the parties agreed that the balance of the debt secured by

the townhome as of the date of separation was $90,000.00, all of which was incurred

during the marriage, but they did not stipulate to the classification and distribution

of this debt. Wife contended the debt was marital, and Husband contended that at

least some portion of the debt was Wife’s separate debt.

       On 1 December 2017, the trial court entered the equitable distribution order.

The trial court considered the parties’ contentions for unequal distribution but

determined that an equal distribution was equitable. The trial court determined that



1 Our record does not indicate the status of the postseparation and alimony claims, but those are not
relevant to this appeal.

2 It appears that $186,000.00 was actually the gross value of the townhome, since the parties agreed
that the $90,000.00 debt was secured by the townhome, so the net value would therefore be $96,000.00,
but the exact value does not change our analysis on appeal.

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the “marital component” of the townhome was $90,000.00 and distributed it as

marital property to Wife and distributed the $90,000.00 mortgage debt to Wife. The

trial court calculated that the value of the gross marital estate including this

“marital” value of the townhome and thus calculated the net value of the marital

estate as “(-)$8,566.62” and awarded an equal division of the marital property and

debt. As a result, Wife owed Husband a distributive award of $539.31. Wife timely

appealed.

                                    II.      Jurisdiction

      This Court has jurisdiction to review this equitable distribution order under

North Carolina General Statute § 50-19.1:

             Notwithstanding any other pending claims filed in the
             same action, a party may appeal from an order or judgment
             adjudicating a claim for absolute divorce, divorce from bed
             and board, child custody, child support, alimony, or
             equitable distribution if the order or judgment would
             otherwise be a final order or judgment within the meaning
             of G.S. 1A-1, Rule 54(b), but for the other pending claims
             in the same action.

N.C. Gen. Stat. § 50-19.1 (2017).

                             III.         Standard of Review

             The standard of review on appeal from a judgment entered
             after a non-jury trial is whether there is competent
             evidence to support the trial court’s findings of fact and
             whether the findings support the conclusions of law and
             ensuing judgment. The trial court’s findings of fact are
             binding on appeal as long as competent evidence supports
             them, despite the existence of evidence to the contrary.


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             The trial court’s findings need only be supported by
             substantial evidence to be binding on appeal. We have
             defined substantial evidence as such relevant evidence as
             a reasonable mind might accept as adequate to support a
             conclusion.

Clark v. Dyer, 236 N.C. App. 9, 13, 762 S.E.2d 838, 839 (2014).

   VI.    Classification and Valuation of “Marital Component” of the Townhome

       On appeal, Wife challenges several of the trial court’s findings of fact and

related conclusions of law, all relating to the classification of the townhome.

             Upon application of a party for an equitable distribution,
             the trial court shall determine what is the marital property
             and shall provide for an equitable distribution of the
             marital property in accordance with the provisions of N.C.
             Gen. Stat. § 50-20. In so doing, the court must conduct a
             three-step analysis. First, the court must identify and
             classify all property as marital or separate based upon the
             evidence presented regarding the nature of the asset.
             Second, the court must determine the net value of the
             marital property as of the date of the parties’ separation,
             with net value being market value, if any, less the amount
             of any encumbrances. Third, the court must distribute the
             marital property in an equitable manner.

Chafin v. Chafin, ___ N.C. App. ___, ___, 791 S.E.2d 693, 698 (2016) (quotation marks,

brackets, and ellipsis omitted).

       Wife challenges portions of the following findings and related conclusions of

law:

             [4. b.] 7) Around 2000, Ms. Clemons purchased a
             townhome located [in] Concord for about $160,000.00. Just
             prior to the marriage, Ms. Clemons mortgaged the


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                                   Opinion of the Court



             property. The mortgage was paid off, but the source of the
             funds are unknown. The parties mortgaged the property
             during the marriage. The parties agreed that the mortgage
             on the property at the date of separation was $90,000.00.
             The tax value on the townhome was $161,190.00 on March
             20, 2006. There was no appraisal done on the home at or
             near the date of separation. Therefore, the marital portion
             is at least equal the marital debt of $90,000.

             ....

             [4.] g.     On Schedule L, the parties agreed that those
             items, which includes the former marital residence, is the
             separate property of Ms. Clemons with the exception of the
             marital component noted above.

             ....

             [5. e.] 1)    The former marital residence was owned by
             Ms. Clemons prior to the marriage. She mortgaged the
             property prior to the marriage to invest in Mr. Clemon’s
             [sic] business. Later the home was mortgaged at least once
             more for $90,000.00. Limited documentation was available
             regarding the marital component.

Wife challenges portions of these findings as unsupported by the evidence or contrary

to the stipulations in the pretrial order.

      Finding of fact 4 (g) noting “the exception of the marital component noted

above” is not supported by competent evidence in the record and is contrary to the

parties’ stipulation. The pretrial order does not include any mention of a “marital

component” of the townhome or any issue of valuation of a “marital component” or

valuation of an increase in value of the townhome during the marriage. And there

was no evidence which could support classification or valuation of a “marital


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component.” The parties stipulated only that the townhome was Wife’s separate

property, with a date of separation value of $186,000.00. Neither party introduced

evidence needed to value a “marital component” of the townhome, most likely because

they had stipulated that it was entirely separate.

      It is well-established that stipulations in a pretrial order are binding upon the

parties and upon the trial court. See Crowder v. Jenkins, 11 N.C. App. 57, 63, 180

S.E.2d 482, 486 (1971) (“[S]tipulations by the parties have the same effect as a jury

finding; the jury is not required to find the existence of such facts; and nothing else

appearing, they are conclusive and binding upon the parties and the trial judge.”).

“Accordingly, the effect of a stipulation by the parties withdraws a particular fact

from the realm of dispute.” Plomaritis v. Plomaritis, 222 N.C. App. 94, 101, 730

S.E.2d 784, 789 (2012) (brackets and quotation marks omitted).

      In equitable distribution cases, stipulations in the pretrial order are intended

to limit the evidence needed and to define the issues the trial court must decide. See

id. at 106-07, 730 S.E.2d at 792 (“We also note that this is an equitable distribution

case, where a pre-trial order including stipulations such as those in this case is

required by N.C. Gen. Stat. § 50-21(d) and Local Rule 31.9. In equitable distribution

cases, because of the requirements of statute and local rules, the stipulations are

frequently quite extensive and precise and are specifically intended to limit the issues

to be tried, and the same is true in this case. Neither party has cited, and we cannot



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find, any prior opinion by our Court in which a trial court has ex mero motu set aside

a pre-trial order or a party’s stipulations after completion of the trial upon the issues

which the stipulations addressed.” (citation omitted)). And as noted by the dissent,

although it is possible for either the trial court or parties to set aside stipulations

under certain conditions, none of those conditions are present here.

      The dissent takes Wife’s counsel’s brief comment about a “marital component”

out of context and construes it as an agreement to assign a “marital component” to

the value of the townhome, but this was not what her counsel was saying. Wife’s

counsel was actually arguing that the $90,000.00 debt was entirely marital or had a

marital component, not the townhome. At trial, Husband took the position that the

$90,000.00 debt was not marital; Wife contended that it was marital.

      The “marital component” comment occurred during Husband’s cross

examination testimony about the $90,000.00 debt. Wife’s counsel asked Husband:

             [Mr. Ferguson:]  And this $90,000 loan or $90,000 debt
             various times was used to make improvements on the
             property.

             [Husband:]     Well, --

             [Mr. Ferguson:]     Yes or no?

             [Husband:]    No, and I’ll say -- the only reason I say that
             is that that was the balance on the mortgage at the time.
             The original mortgage that had been paid down at that
             time was, I think, 102,000 and the -- ‘cause we’d been
             paying an accelerated amount on the principal. We were
             down to about 90,000.


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[Mr. Ferguson:] Well, whatever balance was owed on the
town home on the date that you separated, the 90,000, no
dispute as to marital debt?

[Husband:]    That is correct.

[Mr. Ferguson:]      And I believe your testimony was that
the --
       MS. CAIN: Your Honor, I’m going to object to that
       question. That draws a legal conclusion, whether or
       not it’s marital.

      THE COURT:        Well, the whole pretrial order is
      based on that contention, stuff like marital and not
      marital and separate and --

      MS. CAIN: Well, yes, but that debt actually is on a
      schedule. We don’t agree that it’s marital.

      THE COURT:        Okay. Well, I don’t know how else
      you’re going to ask him what he thinks the debt is
      on the date of separation to resolve the difference,
      then. He either agrees to it or he has an estimate of
      what it was.

      MS. CAIN:     I don’t --

      THE COURT: On the date of separation, what do
      you think the debt was on the home, the town home?

      [Husband]:    I believe it was about 90,000.

      MS. CAIN:           We’re not disputing that; we’re
      disputing that it’s marital.

      MR. FERGUSON:         The debt was --

      THE COURT:      Well, they’ve agreed that the debt
      was incurred during the marriage and that it was


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                                   Opinion of the Court



                    paid down during the marriage to 90,000. That’s the
                    testimony thus far.

                    MS. CAIN: Yes. I understand that. But it’s also for
                    property, assets and property, that she is keeping.
                    Normally, the debt goes with the asset.

                    THE COURT:        I don’t know that she’s keeping it.
                    I’ll have to decide how the property’s going to be
                    divided unless she put that on A where they’ve agreed
                    to that.

(Emphasis added.)

      Neither the townhome nor the $90,000.00 debt was on Schedule A of the

Pretrial order, which was “a list of marital property upon which there is an agreement

by and between the parties hereto as to both value and distribution.” The townhome

was on Schedule L, “a list of the separate property, if any, of the [Wife] upon which

there is an agreement and stipulation by and between the parties hereto as to both

value and distribution.” The townhome is listed on Schedule L as Wife’s separate

property, to be distributed to Wife. Wife’s attorney then pointed this out:

             MR. FERGUSON:         Her separate property, I believe it’s
             listed under Schedule L.

             THE COURT:         There’s still a marital portion of it that’s
             subject to be distributed.

             MR. FERGUSON:         It’s a marital component. No dispute.

             THE COURT:        Uh-huh.

             MR. FERGUSON:           That’s what I’m trying to establish
             here.


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                                          Opinion of the Court




(Emphasis added.)

        Going back to the beginning of the line of questioning, Wife’s attorney

attempted to get Husband to agree that the $90,000.00 debt was marital; Husband’s

counsel objected to the characterization of the debt as marital and noted that

Husband did not agree that the debt was marital. Wife’s counsel was certainly not

trying to establish that the townhome or any portion of its value was marital, since

this classification would be entirely opposed to Wife’s interests. Instead, he pointed

out to the trial court that the townhome was listed on Schedule L, as Wife’s separate

property, to be distributed to her. Thus, the “marital component” comment, read in

context of the testimony and discussion in the trial court, is not a reference to

classification of any portion of the value of the townhome.                        During the same

discussion, Wife’s counsel points out the stipulation in Schedule L of the pretrial

order; he does not “invite error” or waive the stipulation. Nothing in the testimony,

counsel’s other statements to the court, or arguments indicates any intention to set

aside any of the stipulations.3 Nor can the trial court set aside a stipulation ex mero

motu without prior notice to the parties:


3 Our dissenting colleague notes that “[t]he trial court certainly could have found that failure to include
a $90,000 asset provided sufficient cause to modify the stipulation.” But the $90,000.00 is the balance
of the debt owed on the date of separation and will be paid by Wife after the marriage; it is not a
“marital asset.” Nor did the parties overlook the $90,000.00 on the pretrial order. Both attorneys
pointed out the pretrial order’s stipulations to the trial court during the colloquy during Husband’s
testimony. It was characterized as a debt, the parties agreed on the value, and they disagreed on its
classification as a marital or separate debt. The trial court classified it as marital debt, and this
classification is not challenged on appeal.

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             Just as a party requesting to set aside a stipulation would
             have to give notice to the opposing parties, and the
             opposing parties would have an opportunity for hearing
             upon the request, the trial court cannot own its own motion
             set aside a pre-trial order containing the parties’
             stipulations after the case has been tried in reliance upon
             that pre-trial order, “without giving the parties notice and
             an opportunity to be heard.”

Id. at 108, 730 S.E.2d at 793 (citation omitted).

      Here, even if the trial court intended to set aside the stipulation based upon

Wife’s counsel’s comment about a “marital component” of the $90,000.00 debt, the

parties would have needed notice so they could present additional evidence to value

the “marital component.” Counsel for both parties specifically noted the stipulations

of the pretrial order and the trial court never gave any indication of an intent to set

aside any of the stipulations. The trial court cannot value the “marital component”

of an asset without competent evidence to support marital contribution to the value,

and no such evidence was presented.

      In Lawrence v. Lawrence, 75 N.C. App. 592, 331 S.E.2d 186 (1985), cited by the

dissent, this Court noted that the marital component of separate property is valued

based upon the active appreciation during the marriage:

             The Court held that increase in value of separate property
             due to active appreciation, which otherwise would have
             augmented the marital estate, is marital property.
                     We conclude that the real property concerned herein
             must be characterized as part separate and part marital.
             It is clear the marital estate invested substantial labor and
             funds in improving the real property, therefore the marital


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               estate is entitled to a proportionate return of its
               investment. That part of the real property consisting of the
               unimproved property owned by defendant prior to
               marriage should be characterized as separate and that part
               of the property consisting of the additions, alterations and
               repairs provided during marriage should be considered
               marital in nature. As the marital estate is entitled to a
               return of its investment, defendant because of her
               contribution of separate property is entitled to a return of,
               or reimbursement or credit for, that contribution.

Id. at 595-96, 331 S.E.2d at 188 (citations omitted).

       The $90,000.00 balance of the debt secured by the townhome cannot equate to

a “marital component” because it does not represent active appreciation from

“additions, alterations and repairs provided during marriage.” Id. at 595, 331 S.E.2d

at 188 (emphasis added).        In fact, the $90,000.00 debt balance is just the opposite;

this is the principal balance that Wife will be required to pay after the marriage, not

a contribution during the marriage.            Only the portion of debt paid during the

marriage or funds expended on repairs or improvements to the townhome during the

marriage could possibly be relevant to a “marital component” of the townhome.

Neither party presented any evidence of the initial amount of the loans, payments

made during the marriage, reduction of principal during the marriage, or any other

factors which may be relevant to a “marital component.”4




4 Husband testified only to the amounts of monthly payments and that the loan was refinanced several
times.

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      Because the parties had stipulated that the townhome was Wife’s separate

property and that its value was $186,000.00, the trial court erred by classifying a

portion of it as marital and attempting to value it based only upon the balance of a

marital debt as of the date of separation. “‘Separate property’ of a spouse as defined

by G.S. 50-20(b)(2) is not subject to equitable distribution.” Crumbley v. Crumbley,

70 N.C. App. 143, 145, 318 S.E.2d 525, 526 (1984). In addition, on Schedule H of the

pretrial order, Husband did not make any contention that there was “[a]ny direct

contribution to an increase in the value of separate property which occurs during the

course of the marriage.”    In fact, as discussed above, Husband contended the

$90,000.00 debt was not marital and although he testified to some improvements to

the property during the marriage, he also denied that this debt was used to improve

the property:

             [Mr. Ferguson:]  And this $90,000 loan or $90,000 debt
             various times was used to make improvements on the
             property.

             [Husband:] Well, --

             [Mr. Ferguson:] Yes or no?

             [Husband:] No, and I’ll say -- the only reason I say that is
             that that was the balance on the mortgage at the time. The
             original mortgage that had been paid down at that time
             was,I think, 102,000 and the -- ‘cause we’d been paying an
             accelerated amount on the principal. We were down to
             about 90,000.

(Emphasis added.)


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      The trial court ignored the stipulations and attempted to rely on numbers in

the record to create a “marital component” of the townhome. The trial court found,

“The tax value on the townhome was $161,190.00 on March 20, 2006. There was no

appraisal done on the home at or near the date of separation.” These facts are correct,

but the tax value of the townhome seven years prior to the date of valuation is

irrelevant, and there was no appraisal of the townhome because the parties had

stipulated to the value. As the trial court also found in finding 5 (e)(1), “Limited

documentation was available regarding the marital component.” This finding is

correct; in fact, there was no documentation of a marital component, because neither

party contended there was a marital component. Therefore, the trial court’s findings

of fact regarding the classification of a “marital component” in the townhome and its

valuation are not supported by competent evidence.

      On appeal, Husband contends that he did present evidence of a “marital

component” of the townhome based upon improvements made during the marriage.

He acknowledges that the townhome was paid off when the parties married, but

argues that during the marriage they incurred debt secured by the townhome and

refinanced it more than once. But as noted above, his testimony on this point was

contradictory at best, and he did not present any evidence of the amount of principal

paid toward the debt during the marriage or active appreciation in the townhome

during the marriage; the only evidence was the debt balance as of the date of



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separation. He also contends on appeal that “[m]ost of the funds were used to make

improvements to the Townhome.”         Husband did testify at trial about several

improvements to the townhome, although he did not present any evidence of the

costs of any of the improvements or the sources of funds for each improvement. In

addition, there was no evidence of the value of the townhome on the date of the

marriage and thus no way for the trial court to determine what portion of an increase

in value, if any, was passive appreciation based simply upon the passage of time and

increase in overall property values.

      But more importantly, the trial court did not make any findings of fact that

$90,000.00 debt was actually used to improve the townhome, and Husband did not

cross-appeal. Therefore, the trial court’s findings regarding the use of the funds are

binding on this Court. The only finding regarding the use of a portion of the borrowed

funds is:

             [4. d.] 1)   . . . On April 10, 2003, Ms. Clemons borrowed
             $43,130.81 against the property to invest in the trucking
             business owned by Mr. Clemons before the marriage. The
             truck was sold in 2007 to purchase the T800 truck.

It was not disputed that the balance of the debt as of the date of separation,

$90,000.00, was incurred during the marriage, and based upon the trial court’s

finding above, almost half of this amount was originally borrowed to invest in




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Husband’s trucking business.5 Beyond this finding, the trial court classified the

$90,000.00 balance of the debt on the townhome as of the date of separation as

marital debt. Wife did not challenge this finding on appeal, and Husband did not

cross-appeal, so it is binding on this Court. See Clark, 236 N.C. App. at 14, 762 S.E.2d

at 839.

       In finding of fact 6, the trial court listed the valuation and distribution of the

marital property.      This finding included the townhome, with a marital value of

$90,000.00, and distributed it to Wife. This distribution of the townhome is in error

because the townhome was Wife’s separate property, and there was no “marital

component” to include in calculation of the marital estate value or distribution. In

finding of fact 7, the trial court listed the amount and distribution of several marital

debts. The $90,000.00 debt on the townhome was distributed to Wife, and while Wife

challenges this distribution in the heading of one of her arguments, she does not make

any argument in her brief challenging this classification or distribution.                    This

argument is deemed abandoned. See N.C. R. App. P. 28(a). Finding of fact 8 finds

that “the gross marital estate is (-)$8,566.62” and divides the marital property and

debt equally, resulting in a distributive award from Wife to Husband of $539.31, but

this calculation erroneously includes the $90,000.00 value assigned to the “marital

component” of the townhome.


5 By the time the parties separated, Husband’s trucking business was defunct, so it was not an asset
considered in equitable distribution.

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      In the findings of fact addressing the distributional factors under N.C. Gen.

Stat. § 50-20(c)(10), the trial court included findings regarding “[t]he difficulty of

evaluating any component asset or any interest in a business, corporation or

profession, and the economic desirability of retaining such asset or interest, intact,

and free from any claim or interference by the other party.” Under this factor, the

trial court found:

             1)     The former marital residence was owned by Ms.
             Clemons prior to the marriage. She mortgaged the property
             just prior to the marriage to invest in Mr. Clemon’s [sic]
             business. Later the home was mortgaged at least once more
             for $90,000.00. Limited documentation was available
             regarding the marital component.

             2)     Ms. Clemons resided in the former marital residence
             prior to the marriage. She continued to live in the home
             after the date of separation.

      Therefore, as part of its determination that an equal division would be

equitable, the trial court considered Wife’s townhome, the $90,000.00 value of the

“marital component” of the townhome, that she had mortgaged it to invest in

Husband’s business, and that she lived in the townhome both before marriage and

after separation.    Because we must reverse the trial court’s classification and

valuation of the “marital component” of the townhome, we also reverse the trial

court’s division and distribution of the marital property and remand for entry of a




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new order classifying the townhome as Wife’s separate property and equitably

distributing the marital property and debt.6

       As in Turner v. Turner, by attempting to classify and value a “marital

component” of the townhome contrary to the stipulations and evidence and then

attempting an equitable result by dividing the net estate equally, “the court put the

cart before the horse.” 64 N.C. App. 342, 346, 307 S.E.2d 407, 409 (1983). The trial

court may in its discretion do equity in the distribution, including an unequal

distribution if supported by the factors under N.C. Gen. Stat § 50-20(c), but it may

not use equity to classify or value marital property or debt. “Where the trial court

decides that an unequal distribution is equitable, the court must exercise its

discretion to decide how much weight to give each factor supporting an unequal

distribution. A single distributional factor may support an unequal division.” Mugno

v. Mugno, 205 N.C. App. 273, 278, 695 S.E.2d 495, 499 (2010) (citation omitted); see

also Watson v. Watson, ___ N.C. App. ___, ___, 819 S.E.2d 595, 602 (2018).

                                        V.      Conclusion

       For the foregoing reasons, we reverse and remand for the trial court to enter a

new order classifying the townhome as Wife’s separate property and distributing the

marital property and debts. Since we have reversed the classification and valuation


6 We note that the townhome was by far the largest “marital” asset, and the net value of the marital
estate without the value of the townhome would be ($98,566.62). This would result in Husband being
required to pay Wife $44,460.69 to equalize the distribution, a result the trial court may have deemed
inequitable.

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of the most valuable asset included in the marital estate, and the trial court

considered this factor as part of its analysis of the distributional factors, we remand

for the trial court to reconsider whether “an equal division is not equitable”

considering the change in classification of the townhome and net value of the marital

estate. N.C. Gen Stat. §50-20(c) (2017). The determination of whether an equal

division is not equitable is in the trial court’s discretion, and it must exercise its

discretion to consider the division in light of this opinion, so the trial court should

make additional findings of fact as it deems appropriate as to the distributional

factors under N. C. Gen. Stat. §50-20(c). See White v. White, 312 N.C. 770, 777, 324

S.E.2d 829, 833 (1985) (“It is well established that where matters are left to the

discretion of the trial court, appellate review is limited to a determination of whether

there was a clear abuse of discretion. A trial court may be reversed for abuse of

discretion only upon a showing that its actions are manifestly unsupported by

reason.” (citations omitted)).

      As the classification and valuation of only one asset was challenged on appeal,

on remand the parties should not be permitted a “second bite at the apple” by

presenting new evidence or argument as to the classification or valuation of marital

or divisible property, but in the trial court’s discretion, they may present additional

evidence addressing the distributional factors under N.C. Gen. Stat. 50-20(c) since

the trial court must consider those factors, including “[t]he income, property, and



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                                 CLEMONS V. CLEMONS

                                  Opinion of the Court



liabilities of each party at the time the division of property is to become effective.”

N.C. Gen. Stat. § 50-20(c)(1).

      REVERSED AND REMANDED.

      Judge DILLON concurs.

      Judge BERGER dissents in separate opinion.




                                         - 20 -
No. COA18-433 – Clemons v. Clemons


      BERGER, Judge, dissenting in separate opinion.


      For the reasons stated herein, I respectfully dissent.

      The parties stipulated in the pretrial order that the townhome was entirely

Wife’s separate property, valued at $186,000. Nevertheless, the trial court classified

the townhome partially as Wife’s separate property and partially marital property

because there was active appreciation in the townhome’s value during the parties’

marriage. The trial court found that the “marital portion” of the townhome was “at

least equal to the marital debt of $90,000.” Wife contends that the trial court erred

by setting aside the parties’ stipulation that the townhome was entirely Wife’s

separate property in order to find that the townhome was subject to a $90,000

“marital component.”

      However, Wife waived appellate review of this issue by inviting any alleged

error. “A party may not complain of action which he induced.” Frugard v. Pritchard,

338 N.C. 508, 512, 450 S.E.2d 744, 746 (1994). Invited error is

             a legal error that is not a cause for complaint because the
             error occurred through the fault of the party now
             complaining. The evidentiary scholars have provided
             similar definitions; e.g., the party who induces an error
             can’t take advantage of it on appeal, or more colloquially,
             you can’t complain about a result you caused.

Romulus v. Romulus, 215 N.C. App. 495, 528, 715 S.E.2d 308, 329 (2011) (citation

and quotation marks omitted).
                                 CLEMONS V. CLEMONS

                                 BERGER, J., dissenting



         Here, the trial court remarked during the trial that there was a “marital

portion” of the townhome that was “subject to be distributed.” The trial court was

not, as the majority contends, addressing the marital debt, but clearly discussing the

asset.

                     THE COURT: I’ll have to decide how the property’s
                     going to be divided unless she put that on [Schedule]
                     A where they’ve agreed to that.

                     [Wife’s Attorney]: Her separate property, I believe
                     it’s listed under Schedule L.

                     THE COURT: There’s still a marital portion of it
                     that’s subject to be distributed.

                     [Wife’s Attorney]: It’s a marital component. No
                     dispute.

                     THE COURT: Uh-huh.

(Emphasis added.)

         By responding that “It’s a marital component. No dispute,” Wife invited the

error, if any. Because any purported error that may have occurred at trial “occurred

through the fault of [Wife],” Romulus, 215 N.C. App. at 528, 715 S.E.2d at 329, she

has waived appellate review of this issue.

         Even if Wife had not waived appellate review, the above exchange reflected

Wife’s consent for the trial court to set aside the parties’ stipulation that the

townhome was entirely Wife’s separate property. Generally, “[a]dmissions in the

pleadings and stipulations by the parties have the same effect as a jury finding; the


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                                CLEMONS V. CLEMONS

                                BERGER, J., dissenting



jury is not required to find the existence of such facts; and nothing else appearing,

they are conclusive and binding upon the parties and the trial judge.” Crowder v.

Jenkins, 11 N.C. App. 57, 63, 180 S.E.2d 482, 486 (1971) (citation omitted). However,

“[s]tipulations may be set aside in certain circumstances.” Plomaritis v. Plomaritis,

222 N.C. App. 94, 106, 730 S.E.2d 784, 792 (2012).

                    It is generally recognized that it is within the
             discretion of the court to set aside a stipulation of the
             parties relating to the conduct of a pending cause, where
             enforcement would result in injury to one of the parties and
             the other party would not be materially prejudiced by its
             being set aside. A stipulation entered into under a mistake
             as to a material fact concerning the ascertainment of which
             there has been reasonable diligence exercised is the proper
             subject for relief. Other proper justifications for setting
             aside a stipulation include: misrepresentations as to
             material facts, undue influence, collusion, duress, fraud,
             and inadvertence.

Lowery v. Locklear Const., 132 N.C. App. 510, 514, 512 S.E.2d 477, 479 (1999)

(citations and quotation marks omitted).

                    Although it may be appropriate for a trial court on
             its own motion to set aside a parties’ stipulation for one of
             the reasons stated in Lowery or to prevent manifest
             injustice, there are limits to the court’s discretion to set
             aside a stipulation. First, Rule 16(a)(7) [of the North
             Carolina Rules of Civil Procedure] itself states that a
             stipulation may be “modified at the trial to prevent
             manifest injustice.” N.C. Gen. Stat. § 1A–1, Rule 16(a)
             (emphasis added). Modification of a stipulation at the trial
             gives all parties immediate notice of the modification and
             allows the parties the opportunity to present additional
             evidence which may be required based upon the
             elimination of the stipulation.


                                           3
                                       CLEMONS V. CLEMONS

                                       BERGER, J., dissenting




Plomaritis, 222 N.C. App. at 107, 730 S.E.2d at 793 (emphasis in original).

        Here, the majority opinion implies that the trial court made an ex mero motu

post-trial modification to the parties’ stipulation. However, to the extent there was

any modification, it was made at trial and with Wife’s consent. The majority opinion’s

failure to make a distinction between stipulation modifications that occur during trial

and post-trial is essential because it relates to the parties’ right to notice and

opportunity to be heard.

        The trial court certainly could have found that failure to include a $90,000

asset provided sufficient cause to modify the stipulation.7 Given the evidence in the

record, the trial court correctly concluded that the townhome should have been

classified and distributed as part separate and part marital property due to its active

appreciation during the marriage. See Lawrence v. Lawrence, 75 N.C. App. 592, 595

331 S.E.2d 186, 188 (1985) (“Part of the real property consisting of the unimproved

property owned by defendant prior to marriage should be characterized as separate

and that part of the property consisting of the additions, alterations and repairs




        7 The majority’s footnote 3 is curious given the very straightforward language contained
herein. The trial court found that the “marital portion” of the townhome was “at least equal to the
marital debt of $90,000.” The trial court valued this asset, the active appreciation of the townhome, at
$90,000. While the trial court’s valuation of both the marital debt on the townhome and the active
appreciation in the townhome’s value at $90,000 has apparently caused some confusion, this dissent
does not address in any way, shape, or fashion the trial court’s valuation or distribution of the $90,000
debt owed on that asset.


                                                   4
                                 CLEMONS V. CLEMONS

                                 BERGER, J., dissenting



provided during marriage should be considered marital in nature.”). Moreover, the

trial court immediately notified the parties during the trial that it believed the

townhome was subject to a marital component of active appreciation.

       In addition, one could argue that there was evidence that could support the

trial court’s valuation of the “marital portion” of the townhome. Prior to the marriage,

Wife purchased and paid off the mortgage on the townhome. During the marriage,

the parties lived in the townhome and took out multiple lines of credit against the

equity on the townhome. Defendant testified that the parties spent most of the loan

proceeds to remodel and make improvements to the townhome. Wife did not dispute

this testimony.

       Admittedly, the trial court’s findings as to valuation of the townhome are

limited. But, evidence in the record demonstrates that there was active appreciation

of separate property. Additional findings of fact from the trial court could resolve this

issue, as could additional evidence if the trial court deems necessary. This Court

should not hamstring a trial court by simply instructing it to “get it over,” instead of

getting it right.




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