Ross v. Ross
230 N.C. App. 28
N.C. Ct. App.2013Background
- Plaintiff Kenneth Ross appeals from trial court orders classifying and valuing the Emerald Isle Property in an equitable distribution action with Defendant Linda Ross (Osborne).
- The Property was acquired prior to marriage and enhanced with additions during the marriage, creating dual (marital and separate) character.
- After multiple prior appeals, the matter was remanded to reclassify and revalue the Property; two remand orders were entered on March 15, 2012 (Final Judgment and an Order to sell).
- Evidence shows the lot was purchased in 1987 for $86,000 and a $65,000 loan assisted the pre-marital purchase; seven loans affected the Property over time.
- The trial court used a source-of-funds approach to allocate portions of the Property to marital, Plaintiff’s separate, and Defendant’s separate interests, with initial findings: 53% marital, 29% Plaintiff’s separate, 18% Defendant’s separate, yielding a 55.5%/44.5% equity split.
- The court found the post-separation appreciation was passive and allocated it to the parties’ interests; it ordered the Property to be sold.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Property classification/valuation complied with Ross I | Ross contends misclassification of the pre-marital and post-marital components. | Defendant argues the trial court properly applied the source-of-funds methodology. | Partial affirmance; remand for correct classification/valuation. |
| Whether the $65,000 loan payoff should be marital or separate | Payoff should reflect pre-marital payment as Plaintiff’s separate property. | Payoff occurred during marriage; entire payoff is marital. | Entire $65,000 payoff deemed marital; error requiring remand. |
| Post-separation payments characterization and impact on ownership | Post-separation payments should be partly divisible and not wholly attributed to ownership shares. | Post-separation payments as divisible property, distributed by contribution. | Remand to adjust divisible-property amount by $2,163.00 and recalculate shares. |
| Effect of post-separation, passive appreciation on distribution | Passive post-separation appreciation should be allocated and distributed as divisible property. | Appreciation treated consistent with source-of-funds and existing allocations. | Remand to reallocate the passive post-separation appreciation and adjust equity accordingly. |
| Whether the sale order should stand pending appellate process | Sale should be halted until proper equitable distribution is resolved. | No authority shown; sale order remains. | Sale order left undisturbed; issue abandoned per Rule 28(b)(6). |
Key Cases Cited
- Lilly v. Lilly, 107 N.C. App. 484 (1992) (burden shifting between marital and separate property)
- Rice v. Rice, 159 N.C. App. 487 (2003) (active contributions to reduce mortgage are marital)
- Wade v. Wade, 72 N.C. App. 372 (1985) (house and land treated as one asset)
- Stewart v. Stewart, 141 N.C. App. 236 (2000) (classification of property supported by competent evidence)
- Ciobanu v. Ciobanu, 104 N.C. App. 461 (1991) (burden framework for marital vs separate property)