When the trial court made an unfavorable decision against Andrea Kirby Crowell, Thomas D. Bumgardner appealed the matter on her behalf to the Court of Appeals.  Still unsatisfied with the ruling, he appealed to the North Carolina Supreme Court, where he secured a decision that favored Ms. Crowell

In Part 1 we reviewed the North Carolina state courts, the Court of Appeals and the North Carolina Supreme Court process, and how stare decisis requires courts to follow precedent.  

The ruling was a great victory.  Mr. Bumgardner said, “It’s always a pleasure to help a client be on the right side of the law. We are happy that the North Carolina Supreme Court ruled in our favor after raising an additional issue for discretionary review pertaining to corporate standing under North Carolina’s equitable distribution statute. We thank the Court for allowing it.” 

Now, we will specifically examine Ms. Crowell’s case. 

Background

When Ms. Crowell filed a divorce action against her husband, William Crowell, she sought, among other things, equitable distribution of their marital property.  Mr. Crowell filed a counterclaim seeking the same. 

North Carolina statutory law regarding equitable distribution actions (G.S. § 50-20 ) defines all assets spouses purchased during the marriage and before separation as marital property.  It also allows the court to provide for the equitable distribution of the marital property.  Equitable distribution is a legal standard that requires the equal division of acquired marital property and income at divorce. 

Trial Decision

The trial court examined the manner by which Mr. and Mrs. Crowell lived and managed their money.  The court ultimately determined that the marital property would be divided equally.  To do so, Mrs. Crowell would pay Mr. Crowell a particular distributive amount.   

Mrs. Crowell lacked the ability to pay the distributive amount, so the court ordered her to sell two real estate properties right away and to distribute the proceeds to Mr. Crowell. 

Prior to the divorce, Mrs. Crowell transferred ownership of one property to her son.   The court considered the transfer fraudulent.  She could either get back the deed and sell the properties or have her son directly pay Mr. Crowell an amount reflecting the majority amount of the money he gained in the gift.   

Ms. Crowell appealed the decision and questioned if the trial court erred when ordering her to liquidate property she owned separately in order to pay for a distributive award. 

Court of Appeals

The Court of Appeals affirmed the trial court’s equitable distribution decision regarding the sale of the properties.  It, however, vacated or set aside the trial court’s decision regarding her son.  The court agreed the transfer was intended to defraud creditors and that her son was not a good faith purchaser.  It did not believe, however, that an equitable distribution order was the proper means by which to hold her son, a third party, responsible for a marital debt. 

Ms.  Crowell again appealed.

North Carolina Supreme Court

The Supreme Court stated that the whether the trial court order separate property under  

G.S. § 50-20 to be sold in in order to pay a distributive award was the crux of the matter.  The high court held that it is not allowed to disrupt separate rights when making equitable distribution award orders.  It understood matters involving marital debt and knew equitable distribution awards might affect parties’ separate property.  It admitted, too, that it had no say on whether parties could use separate property to satisfy distributive awards.  It, nonetheless, cannot dictate how the parties will pay the award and cannot order them to sell individual properties. 

The high court, thus, found that the Court of Appeals erred in affirming the trial court’s equitable distribution order regarding the sale of the properties.  It furthermore remanded the matter for discretionary review on whether the statute allowed corporations to seek reimbursements of reckless debts. 

Because the decision resolved the fraudulent transfer issue the Court of Appeals confronted, the high court did not need to address it in their decision. 

Discretionary Review

A matter involving discretionary review usually concerns a subject or legal doctrine that that warrants further Supreme Court review. 

There are strict deadlines and rules regarding appeals of final decisions in family matters.  If you are interested in discussing such an appeal, contact Thomas D. Bumgardner right away. He knows the applicable laws and can help you determine your best course of action.  Call 704-887-4981 or email info@ballantynelegal.com.  Learn about the legal services he provides and book an appointment.