Green v. GreenÂ
255 N.C. App. 719
| N.C. Ct. App. | 2017Background
- Stanley B. Green and Jennifer Green married in 1994, separated in June 2013, and had four children; Jennifer largely stayed home and reactivated employment only after separation.
- Defendant was a shareholder in a law firm that prosecuted a long-running contingency-fee case (the "Cruise case") that settled for $16.9 million in December 2014, yielding the firm a $5,492,500 fee; Defendant received a large payment in March 2015.
- Trial court valued Defendant's firm and treated $636,575 of the Cruise-case proceeds as "deferred compensation" and divisible marital property, awarding half of that amount to Plaintiff; total marital estate division awarded Plaintiff 53% and the marital home to Plaintiff (with mortgage liability allocated to her).
- The trial court awarded permanent alimony of $6,000/month to Plaintiff based on an averaging of Defendant's 2014–2015 income rather than an express finding of Defendant's current income.
- Defendant appealed, arguing (inter alia) the Cruise proceeds were not deferred compensation or divisible property, the firm valuation and passive-increase findings were erroneous, the mortgage allocation was improper, the distributive award funding was unsupported, and the alimony award relied on improper income findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contingency-fee proceeds paid after separation are "deferred compensation" under N.C. Gen. Stat. § 50-20(b)(1) | Cruise proceeds are deferred compensation and therefore marital property | Contingent fee was future income/potential, not deferred compensation; no vested right existed at separation | Not deferred compensation; contingency proceeds are separate property (reversed) |
| Whether the Cruise proceeds are divisible property under § 50-20(b)(4)(b) (e.g., contractual right, bonus) | Proceeds derive from contract/efforts during marriage and are divisible (or function as a bonus) | No right to payment existed at separation; contingency contract was between firm and client; proceeds are firm/shareholder property, not divisible contractual/right-based property | Not divisible property; trial court erred classifying proceeds as divisible; proceeds are separate property |
| Whether trial court properly distributed mortgage debt and should have required refinance to remove Defendant from note | (Plaintiff sought house and mortgage, trial court ordered her to assume payments) | Defendant argued trial court failed to fully distribute mortgage debt because his name remained on the note | Trial court did not abuse discretion; it distributed the asset and debt to Plaintiff and required her to "assume and pay in full" (Defendant waived request to order refinance). On remand, clarifications can be made if ambiguous |
| Whether alimony award properly based on averaged prior-year income without finding current income | Plaintiff supported alimony using trial court's income findings and discretionary factors | Defendant argued court failed to find his current actual income and improperly averaged prior years without finding current income unreliable | Reversed and remanded: trial court abused discretion by relying on averaged prior years without first finding Defendant's current income (or finding current income not credible); must determine current income on remand |
Key Cases Cited
- Lee v. Lee, 167 N.C. App. 250 (N.C. Ct. App.) (standard of review for bench trial findings and conclusions)
- In re Summons of Ernst & Young, 363 N.C. 612 (N.C.) (statutory interpretation questions reviewed de novo)
- Romulus v. Romulus, 215 N.C. App. 495 (N.C. Ct. App.) (classification of property in equitable distribution is legal question)
- Musser v. Musser, 909 P.2d 37 (Okla. 1995) (contingent-fee cases treated as future income, not marital property)
- Wiencek-Adams v. Adams, 331 N.C. 688 (N.C.) (equitable distribution is discretionary; abuse of discretion standard)