                                   NO. COA14-249

                         NORTH CAROLINA COURT OF APPEALS

                              Filed: 7 October 2014


ROSEMARY LYNN GROVE POWER,
     Plaintiff,

    v.                                      Wake County
                                            No. 12 CVD 9258
THOMAS ALFRED POWER,
     Defendant.


    Appeal by defendant from equitable distribution judgment

entered 28 August 2013 by Judge Christine Walczyk in Wake County

District Court.      Heard in the Court of Appeals 26 August 2014.


    Allen & Spence, PLLC, by Scott E. Allen, for plaintiff-
    appellee.

    Manning, Fulton & Skinner, P.A., by Michael S. Harrell, for
    defendant-appellant.


    BRYANT, Judge.


    Where defendant failed to present evidence of potential tax

consequences before the close of evidence, the trial court was

not required to consider those potential tax consequences when

entering    an    equitable    distribution    judgment.      Although    the

Kelley     Blue   Book     falls   within   Rule   803(17)   as   a   hearsay

exception, defendant was not prejudiced by the omission of such

evidence where defendant was permitted to give opinion testimony
                                      -2-
as to the value of the marital cars.               Where defendant failed to

show that a monetary gift to the marital couple was not marital

property, the trial court properly considered that money as part

of the marital assets.

     On 2 July 2012, plaintiff Rosemary Lynn Grove Parker filed

a   complaint     against     defendant     Thomas    Alfred     Power    seeking

equitable      distribution,     divorce    from     bed   and   board,       and    a

temporary restraining order to prevent defendant from wasting

marital   assets.       Defendant     answered       and   counterclaimed           for

alimony and post-separation support, equitable distribution, and

expenses and attorneys’ fees.

     On   21    May   2013,    plaintiff    and    defendant     filed    a   joint

dismissal in which plaintiff dismissed her claim for divorce

from bed and board and defendant dismissed his claim for alimony

and post-separation support.

     A hearing on the parties’ competing equitable distribution

claims was held on 8 April 2013 in Wake County District Court,

the Honorable Christine Walczyk, Judge presiding.                 On 28 August,

the trial court entered a judgment for equitable distribution

between the parties.        Defendant appeals.

                              _________________________
                                           -3-
      On appeal, defendant raises three issues as to whether the

trial court erred in: (I) not considering the tax consequences

arising     from   its    equitable        distribution          judgment;      (II)    in

excluding defendant’s Kelley Blue Book values for the marital

cars;   and    (III)     in    not    deducting         from    the     marital    estate

financial gifts made to plaintiff and defendant.

                                                 I.

      Defendant       argues    that       the    trial        court    erred     in   not

considering     the    tax     consequences           arising    from    its    equitable

distribution judgment.          We disagree.

                    Our review of an equitable distribution
              order is limited to determining whether the
              trial    court  abused   its  discretion   in
              distributing the parties' marital property.
              The distribution of marital property is
              vested in the discretion of the trial courts
              and the exercise of that discretion will not
              be upset absent clear abuse.     Accordingly,
              the findings of fact are conclusive if they
              are supported by any competent evidence from
              the record.

Robinson v. Robinson, 210 N.C. App. 319, 322, 707 S.E.2d 785,

789 (2011) (citations, quotations, and parentheses omitted).

      Defendant contends the trial court erred in not considering

the   tax   consequences       of    its   equitable       distribution         judgment.

Specifically, defendant argues that pursuant to N.C. Gen. Stat.
                                           -4-
§    50-20(c),      the    trial   court      was   required      to   consider       tax

consequences prior to making its judgment.

       North Carolina General Statutes, section 50-20, holds that:

               There shall be an equal division by using
               net value of marital property and net value
               of divisible property unless the court
               determines that an equal division is not
               equitable.   If the court determines that an
               equal division is not equitable, the court
               shall   divide  the   marital  property  and
               divisible property equitably.      The court
               shall consider all of the following factors
               under this subsection:

               . . .

               (11) The tax consequences to each party . .
               . .   The trial court may, however, in its
               discretion, consider whether or when such
               tax consequences are reasonably likely to
               occur in determining the equitable value
               deemed appropriate for this factor.

N.C.G.S. § 50-20(c)(11) (2013).                  However, a trial court must

consider all of the distributional factors in N.C.G.S. § 50-

20(c)      only    when     a   party    presents      evidence    that    an     equal

distribution would be inequitable.                  Embler v. Embler, 159 N.C.

App.    186,      189,    582   S.E.2d   628,    631   (2003)     (emphasis     added)

(citations and quotation omitted).

       In its pre-trial order, the trial court noted that both

parties had raised contentions, including tax consequences, as

to   why    an     equal    division     of     marital   assets       would    not    be
                                          -5-
equitable.     However, during the equitable distribution hearing,

neither   party     presented       any   evidence   regarding        potential         tax

consequences caused by an equal distribution.                         In fact, the

record    shows    that      defendant      only   raised    the      issue      of    tax

consequences       as   to    a    single     marital   account,       a    Scottrade

account, at the end of the hearing:

            [DEFENDANT]: Does Your Honor also consider
            that Scottrade account? I shouldn't be
            penalized with all the tax burden on that if
            you're weighing the cash-out values.

            THE COURT: I'm going to consider -- I mean,
            you guys didn't put on any evidence about
            tax consequences, but I'm going to consider
            the liquid or nonliquid nature of assets
            when I do the division.

            [DEFENDANT]: Okay.

As   defendant     failed     to    present     evidence    during      the      hearing

regarding     potential       tax     consequences      caused        by    an        equal

distribution, the trial court did not err in failing to consider

tax consequences in awarding an equitable distribution. See id.

      Defendant further argues that the trial court erred in not

considering    the      potential     tax    consequences        of   its     equitable

distribution judgment because defendant sent to the trial court,

after the equitable distribution hearing, an email challenging

plaintiff’s       proposed     equitable      distribution       order.          In    his

email,    defendant      asked      the   trial    court    to     address       “a    few
                                       -6-
discrepancies” and to “consider[] the tax consequences on the

Defendant’s       behalf.”         Plaintiff     immediately         objected    to

defendant’s email, and the trial court did not respond to either

party.    In its equitable distribution judgment, the trial court

did not make any findings of fact as to tax consequences created

by an equal distribution and concluded as a matter of law that

“[a]n equal distribution of marital and divisible property is

equitable.”

       Defendant’s argument that he offered evidence concerning

potential tax consequences to the trial court is without merit,

as defendant’s email was sent after the close of evidence.                      See

Wall v. Wall, 140 N.C. App. 303, 312, 536 S.E.2d 647, 653 (2000)

(“The trial court is not required to consider tax consequences

unless the parties offer evidence about them. Defendant may not

now ascribe error to the trial court's failure to make such

findings without demonstrating that such evidence was brought to

the    trial    court's   attention     before    the       close    of   evidence.

Defendant has the burden of showing that the tax consequences of

the distribution were not properly considered, and he has failed

to    carry    that   burden.”).    Accordingly,      the    trial    court   acted

within    its    discretion   in    ordering     an   equitable       distribution
                                  -7-
judgment that did not address tax consequences.                    Defendant’s

argument is overruled.

                                  II.

    Defendant    next    argues   that       the   trial   court      erred   in

excluding defendant’s Kelley Blue Book values for the marital

cars.

    During the equitable distribution hearing, the trial court

permitted   plaintiff   to   testify    as    to   the   value   of    the    two

marital cars.    Plaintiff testified that she believed the value

of her car to be about $3,500.00, based on existing mechanical

and cosmetic issues with the car and based on an appraisal of

the car by Carmax. Plaintiff then testified that she believed

the value of defendant’s car to be somewhere between $2,673.00

and $2,773.00, based on the Kelley Blue Book.              Defendant did not

object to plaintiff’s testimony.

    When defendant testified as to the value of the marital

cars, he sought to admit into evidence copies of the Kelley Blue

Book values of the cars.      The trial court sustained plaintiff’s

objection to this evidence, stating it was “hearsay information”

and that defendant could “tell me what your opinion is about the

value of the car, but you can’t show me the Blue Book value.”

Defendant then gave his opinion that plaintiff’s car was worth
                                           -8-
$7,197.00 and his own car $3,001.00, based on the Kelley Blue

Book values.

       Defendant contends the trial court erred in refusing to

admit his evidence of the cars’ Kelley Blue Book values and that

this “preclusion of [defendant’s] opinion evidence substantially

prejudiced      [him].”       This Court has previously held that the

Kelley    Blue     Book   falls      within      Rule    803(17)        as   a    hearsay

exception for market reports.                 See State v. Dallas, 205 N.C.

App. 216, 220, 695 S.E.2d 474, 477 (2010) (“Rule 803(17) of the

Rules     of       Evidence     provides         that        [m]arket        quotations,

tabulations,         lists,       directories,           or         other        published

compilations, generally used and relied upon by the public or by

persons    in    particular     occupations        are        not     excluded     by    the

hearsay rule. We hold that both the Kelley Blue Book and the

NADA     pricing     guide    fall    within      the        Rule     803(17)      hearsay

exception.”).        As such, the trial court erred in refusing to

admit defendant’s Kelley Blue Book values as evidence.

       However, even though the trial court erred in not admitting

this    evidence,     defendant      has    failed      to    show     how   this       error

“substantially       prejudiced”      him.        The        record    indicates        that

plaintiff and defendant each gave opinion testimony as to the

value of the two marital cars, including each party noting that
                                           -9-
they consulted the Kelley Blue Book in determining the cars’

values.     Defendant did not offer additional testimony regarding

the   condition       of    the    cars,   other    than     the    Kelley    Blue      Book

values,     nor       did      defendant      contest        plaintiff’s       evidence

concerning the cars’ conditions and values.                        As such, defendant

was not prejudiced because the trial court heard and weighed the

testimony of both parties as to the value of the cars before

making     its    determination        that      each      party    should    keep      its

respective car as part of the equitable distribution judgment.

See id. at 220—21, 695 S.E.2d at 477 (noting that the defendant

failed    to     demonstrate       prejudice       where    the    testimony       of    the

witnesses as to the value of several cars was given, considered,

and weighed, even though the testimony varied as to the cars’

values).         Accordingly,       the    trial    court’s        error   about     which

defendant argues was not prejudicial to defendant.

                                           III.

      Finally, defendant argues that the trial court erred in not

deducting      from      the   marital     estate       financial     gifts    made       to

plaintiff and defendant.             We disagree.

      Pursuant      to      N.C.   Gen.    Stat.    §    50-20,     marital    property

includes all property “acquired by either spouse or both spouses

during the course of the marriage and before the date of the
                                           -10-
separation of the parties, and presently owned, except property

determined to be separate property[,]” while separate property

includes all property “acquired by a spouse by bequest, devise,

descent, or gift during the course of the marriage.” N.C.G.S. §

50-20(b)(1),(2)        (2013).            “The     party      claiming    a     certain

classification has the burden of showing, by the preponderance

of   the    evidence,       that    the    property     is     within    the    claimed

classification.”           Burnett v. Burnett, 122 N.C. App. 712, 714,

471 S.E.2d 649, 651 (1996) (citation omitted).

      During the hearing, defendant argued that the trial court

should not consider $51,000.00 as part of the marital estate

because that money was given to defendant by defendant’s father

as a series of gifts.                 Plaintiff testified that defendant’s

father had gifted $51,000.00 to her and defendant over a period

of   time    for     the    purpose       of    depleting     defendant’s      father’s

financial     interests      so    he    could     receive    assisted-living       care

through the government, if needed.                  When questioned by defendant

as   to     where    this     money       was    currently     located,        plaintiff

responded that she did not know where the money was specifically

located, other than “[i]t was just all in the funds. . . .                            I

don’t      know     where    it’s        at.”     Plaintiff     also     agreed     with

defendant’s       assertion       that    defendant    had    deposited     the    funds
                                       -11-
“into our joint account.”         Defendant did not offer any evidence

as to where the money was located, such as in a separate ear-

marked account; rather, defendant only asserted that the funds

were a gift to him from his father.

     The trial court, in its equal distribution order, noted

that: “During the marriage, the parties received regular gifts

from the Defendant’s father. The [defendant]1 failed to establish

that there were any funds left from these gifts on the date of

separation    that   were   separate      and     apart       from   the     accounts

already distributed hereunder.”

     Even    assuming   that     the   $51,000.00       was    given    as    a    gift

solely to defendant and not as a joint gift to both parties, the

evidence    showed   that   these      funds     were    commingled         with   the

parties’ marital funds in their joint account.                   Thus, defendant

had the burden of proof “to trace the initial deposit into its

form at the date of separation.”              Fountain v. Fountain, 148 N.C.

App. 329, 333, 559 S.E.2d 25, 29 (2002) (citation omitted).

            Commingling     of      separate       property          with

1
  We note that the trial court made a typographical error in this
finding by stating in its second sentence that “The Plaintiff
failed to establish . . . .” A review of the hearing transcript
indicates that defendant, not plaintiff, raised the issue of
whether the $51,000.00 was in fact marital property.           As
defendant failed to establish that this money was not marital
property, we therefore correct the trial court’s finding as
presented above.
                                       -12-
             marital   property,  occurring   during   the
             marriage and before the date of separation,
             does not necessarily transmute separate
             property      into     marital      property.
             Transmutation would occur, however, if the
             party claiming the property to be his
             separate property is unable to trace the
             initial deposit into its form at the date of
             separation.

Id. (citations omitted).

       Here, defendant failed to present any evidence tracing the

gift of $51,000.00 from his father to show where these funds

were   located     as   of   the   date    of   separation.     Therefore,       as

defendant failed to prove that the aggregate sum of $51,000.00

was    not   marital    property,    the    trial   court     did   not    err   in

refusing     to    classify    these      funds   as   defendant’s        separate

property. Accordingly, defendant’s argument is overruled.

       Affirmed.

       Judges McGEE and STROUD concur.
