Shope v. Pennington
231 N.C. App. 569
N.C. Ct. App.2014Background
- Dolores Shope and Richard Pennington married in 2002, separated in 2009, and later divorced; Pennington operated Pennington Farms (marital property except the farm real estate, which was his separate property).
- Pretrial stipulation: Shope paid $11,841.84 post-separation on a vehicle debt; Pennington paid $511,522.69 (stipulated) toward marital debts connected to Pennington Farms after separation from funds “generated from Pennington Farms.”
- Trial court initially issued an equitable distribution order that treated post-separation debt reductions as not divisible; it later amended the order after a Rule 59 motion to classify the Pennington payments as divisible property and assigned the full $511,522.69 to Pennington.
- The trial court then awarded an unequal distribution in favor of Pennington, citing his post-separation debt payments as a key factor under N.C. Gen. Stat. § 50-20(c).
- Shope appealed, arguing the court failed to identify the source of funds used for the large post-separation payments and thus improperly assigned full credit to Pennington without giving her consideration if marital funds had been used.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court properly treated post-separation payments toward Pennington Farms debt as divisible and assigned them entirely to Pennington | Shope: Court failed to find/source funds used; if payments came from marital funds, she is entitled to consideration; trial court must identify source before awarding full credit | Pennington: Payments were generated by his operation of Pennington Farms after separation and thus are his to receive | Reversed and remanded: Court must make specific findings identifying the source of funds used for payments; redistribute if marital funds were used and award appropriate credit to Shope |
| Whether trial court properly awarded unequal distribution favoring Pennington given its treatment of post-separation payments | Shope: Unequal award may be unsupported if credit for payments is reduced; court must reassess §50-20(c) factors after correct treatment of payments | Pennington: The same §50-20(c) findings justify unequal division in his favor | Reversed and remanded: Trial court must reconsider whether unequal division remains equitable after resolving source/credit issue |
Key Cases Cited
- Bodie v. Bodie, 727 S.E.2d 11 (N.C. Ct. App. 2012) (trial court must identify source of post-separation payments before awarding credit for them)
- Wiencek-Adams v. Adams, 417 S.E.2d 449 (N.C. 1992) (equitable-distribution orders reviewed for abuse of discretion)
- Walter v. Walter, 561 S.E.2d 571 (N.C. Ct. App. 2002) (spouse entitled to consideration when other spouse uses marital property post-separation)
- Stovall v. Stovall, 698 S.E.2d 680 (N.C. Ct. App. 2010) (trial court may order unequal distribution under §50-20(c))
- Petty v. Petty, 680 S.E.2d 894 (N.C. Ct. App. 2009) (equal division presumptively equitable; court may consider §50-20(c) factors for deviation)