Finkel v. Finkel

590 S.E.2d 472, 162 N.C. App. 344, 2004 N.C. App. LEXIS 117, 2004 WL 76434
CourtCourt of Appeals of North Carolina
DecidedJanuary 20, 2004
DocketNo. COA02-1456
StatusPublished
Cited by5 cases

This text of 590 S.E.2d 472 (Finkel v. Finkel) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finkel v. Finkel, 590 S.E.2d 472, 162 N.C. App. 344, 2004 N.C. App. LEXIS 117, 2004 WL 76434 (N.C. Ct. App. 2004).

Opinion

McGEE, Judge.

Karol Finkel (defendant) and Charles E. Finkel (plaintiff) were married on 11 March 1973, separated on 15 August 1999, and divorced on 10 October 2000. During the marriage, plaintiff practiced dentistry for a professional association doing business as Charles E. Finkel, D.D.S., P.A. The professional association was dissolved in 1991 and the assets were distributed to the parties. Beginning in January 1991, plaintiff received benefits from two disability insurance policies totaling $17,000 per month due to a somatic condition, dysthymia, which is characterized as chronic mild depression. Premiums for the insurance policies were paid by the professional association. Under both disability policies, plaintiff could continue to receive monthly benefits so long as he remained disabled and did not return to work in the field of dentistry.

Plaintiff filed a complaint on 28 January 2000 seeking a divorce from bed and board, as well as equitable distribution. Defendant filed a counterclaim on 27 March 2000 for alimony, post separation support, an interim distribution of marital property, and she also sought an unequal distribution of marital property in her favor.

Judgment was entered on 1 March 2002 on the parties’ equitable distribution claims. The trial court made extensive findings of fact [346]*346regarding the assets of the parties, including the classification of income from plaintiff’s disability insurance policies as separate property. The trial court considered that income as a distributional factor and ultimately distributed the property in favor of defendant. The trial court awarded $452,349.50 in marital property to defendant and $430,652.50 in marital property to plaintiff. Only the issue of equitable distribution is the subject of this appeal. Defendant appeals.

In defendant’s first assignment of error, she argues the trial court erred in classifying as separate property the disability benefits received by plaintiff after the date of separation. It is defendant’s contention that the benefits are best characterized as marital property and therefore subject to distribution. After careful consideration of defendant’s argument, we are not persuaded and find that this assignment of error is without merit.

Under our equitable distribution statute, upon application of a party, the trial court determines what is the marital property and divisible property of the parties. N.C. Gen. Stat. § 50-20(a) (2001). Initially, “ ‘[the] party claiming that property is marital has the burden of proving beyond a preponderance of the evidence’ that the property was acquired: by either or both spouses; during the marriage; before the date of separation; and is presently owned.” Fountain v. Fountain, 148 N.C. App. 329, 332, 559 S.E.2d 25, 29 (2002) (quoting Lilly v. Lilly, 107 N.C. App. 484, 486, 420 S.E.2d 492, 493 (1992) (citations omitted)). Once a party meets this burden, the burden shifts to the other party to show by a preponderance of the evidence that the property is best characterized as separate. Lilly, 107 N.C. App. at 486, 420 S.E.2d at 493.

A variety of methods have been adopted by different jurisdictions to aid in determining whether property is appropriately classified as separate, marital, or divisible. See Johnson v. Johnson, 117 N.C. App. 410, 412, 450 S.E.2d 923, 925 (1994). Our Supreme Court rejected a mechanistic, more literal approach to the classification of property in equitable distribution actions and instead adopted the analytic approach in reviewing classification of personal injury awards. Johnson v. Johnson, 317 N.C. 437, 451, 346 S.E.2d 430, 438 (1986). Under the analytic approach, the pertinent question is what are the benefits or proceeds at issue intended to replace. See Johnson, 317 N.C. at 446-47, 346 S.E.2d at 435. Courts that have adopted the analytic approach in classifying property for the purpose of equitable distribution have “ ‘consistently held that the portion of [a personal injury] award representing compensation for non-economic losses— [347]*347i.e., personal suffering and disability — is the separate property of the injured spouse; the portion of an award representing compensation for economic loss . . . during the marriage ... is marital property.’ ” Johnson, 117 N.C. App. at 412, 450 S.E.2d at 925 (quoting Johnson, 317 N.C. at 447-48, 346 S.E.2d at 436); see also Cooper v. Cooper, 143 N.C. App. 322, 545 S.E.2d 775 (2001) (utilizing the analytic approach, Social Security benefits are disability benefits intended to replace loss of earning capacity and are thus separate property).

Applying the reasoning of the Supreme Court, our Court held that “disability retirement benefits” which were intended to replace the recipient’s loss of earning capacity due to disability were the separate property of that spouse. Johnson, 117 N.C. App. at 414, 450 S.E.2d at 926. In Johnson, we asked “whether the benefits that plaintiff received were truly disability benefits or were retirement benefits (compensation for economic loss).” Id. at 412, 450 S.E.2d at 925. Our Court’s decision in Johnson is on point as to the issue before our Court in the present case.

Courts in a majority of other states have elected to follow the analytic approach in classifying disability benefits received after separation as separate property. See Hatcher v. Hatcher, 933 P.2d 1222 (Ariz. Ct. App. 1996); Holman v. Holman, 84 S.W.3d 903 (Ky. 2002); Chance v. Chance, 694 So. 2d 613 (La. Ct. App. 1997); Sherman v. Sherman, 740 S.W.2d 203 (Mo. Ct. App. 1987); Gann v. Gann, 620 N.Y.S.2d 707 (N.Y. Sup. Ct. 1994), aff’d, 649 N.Y.S.2d 154 (N.Y. App. Div. 1st Dep’t 1996) ; Gragg v. Gragg, 12 S.W.3d 412 (Tenn. 2000); In re Marriage of Brewer, 976 P.2d 102 (Wash. 1999) (post-dissolution disability insurance benefits are separate property of the disabled spouse regardless of whether marital funds paid the premiums).

In the case before us, the scope of review is limited to whether there was any competent evidence to support the findings of the trial court that the disability benefits received post-separation were separate property. See Taylor v. Taylor, 92 N.C. App. 413, 417, 374 S.E.2d 644, 646 (1988). The trial court’s findings will only be upset if “the decision was unsupported by reason and could not have been the result of a competent inquiry.” Crowder v. Crowder, 147 N.C. App. 677, 681, 556 S.E.2d 639, 642 (2001).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Brady v. Brady
Court of Appeals of North Carolina, 2022
Crago v. Crago
Court of Appeals of North Carolina, 2019
Prelaz v. Town of Canton
760 S.E.2d 389 (Court of Appeals of North Carolina, 2014)
Wright v. Wright
730 S.E.2d 218 (Court of Appeals of North Carolina, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
590 S.E.2d 472, 162 N.C. App. 344, 2004 N.C. App. LEXIS 117, 2004 WL 76434, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finkel-v-finkel-ncctapp-2004.