O'Brien v. O'Brien

• Court: Court of Appeals of North Carolina
• Decided: November 5, 2025
• Docket: 24-960
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA24-960

Filed 5 November 2025

Mecklenburg County, No. 19CVD004868-590

CARRIE O’BRIEN, Plaintiff,

v.

KEVIN O’BRIEN, Defendant.

Appeal by Defendant from order entered 16 January 2024 by Judge Paige

McThenia in Mecklenburg County District Court. Heard in the Court of Appeals 12

August 2025.

Marcellino & Tyson, PLLC, by Clay A. Campbell, for Plaintiff-Appellee.

Thurman, Wilson, Boutwell & Galvin, P.A., by John D. Boutwell, for Defendant-Appellant.

GRIFFIN, Judge.

The questions we are asked to resolve here are related to an equitable

distribution proceeding. Defendant Kevin O’Brien appeals from the trial court’s

amended equitable distribution order, contending the trial court erred in its

classification of his townhomes, bank accounts, and tax liability; its valuation of the

townhomes and accounts; and its consideration of distributional factors. Plaintiff O’BRIEN V. O’BRIEN

Opinion of the Court

Carrie O’Brien cross-appeals from both the original and amended orders, arguing the

trial court erred in its classification of townhomes, a bank account, a portion of cash

funds, and its valuation of townhomes, a car, and club membership. We affirm in

part and remand.

I. Factual and Procedural Background

Plaintiff and Defendant married on 23 November 2002. Plaintiff and

Defendant had their first child on 15 October 2004 and their second child on 12

January 2007. The couple legally separated on 17 August 2018. On 14 March 2019,

Plaintiff filed a complaint for equitable distribution. About two months later,

Defendant filed an answer and a counterclaim for equitable distribution. Following

a three-day trial, the trial court entered a written equitable distribution order on 20

January 2023.

Ten days after the order was entered, Defendant filed a motion pursuant to

Rules 52 and 59 of the North Carolina Rules of Civil Procedure requesting the trial

court to amend its findings and conclusions, make additional findings, amend the

order, and/or order a new trial. The trial court held a hearing on Defendant’s motion

on 6 July 2023. On 16 January 2024, the trial court entered an amended equitable

distribution order. Less than a month later, Defendant filed a notice of appeal.

Plaintiff filed a notice of cross-appeal shortly afterward.

II. Analysis

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Defendant appeals from the amended equitable distribution order arguing the

trial court erred multiple times in its classification and valuation of assets, as well as

its consideration of distributional factors. Plaintiff cross-appeals, likewise claiming

the trial court erred in its classification and valuation of assets.

A. Jurisdiction

This Court has jurisdiction to review a district court’s final judgment in a civil

action. N.C. Gen. Stat. § 7A-27(b)(2) (2023). The trial court’s equitable distribution

order is a final judgment.

B. Standard of Review

This Court reviews an appeal from a non-jury trial judgment to determine

whether “there is competent evidence to support the trial court’s findings of fact and

whether the findings support the conclusions of law and ensuing judgment.” Stovall

v. Stovall, 205 N.C. App 405, 407, 698 S.E.2d 680, 683 (2010). “Competent evidence

is ‘evidence that a reasonable mind might accept as adequate to support the finding.’”

Smith v. Smith, 387 N.C. 255, 258, 912 S.E.2d 762, 765 (2025) (citation omitted). If

there is competent evidence to support a finding, the finding is conclusive on appeal

even though there may be contrary evidence. Johnson v. Johnson, 117 N.C. App. 410,

413, 450 S.E.2d 923, 926 (1994). The trial court weighs the evidence and makes

reasonable inferences from it. Sauls v. Sauls, 236 N.C. App. 371, 373, 763 S.E.2d

328, 330 (2014) (citation omitted). Therefore, this Court shall not reweigh the

evidence on appeal. Id. (citation omitted).

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Conclusions of law are reviewed de novo. Mugno v. Mugno, 205 N.C. App 273,

276, 695 S.E.2d 495, 498 (2010).

This Court reviews an equitable distribution order by determining whether

there was an abuse of discretion. Stovall, 205 N.C. App at 407, 698 S.E.2d at 683.

Under the abuse of discretion standard of review, a trial court’s decision may only be

reversed upon a demonstration that the court’s decision was so arbitrary that it was

not supported by reason. White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833

(1985).

C. Equitable Distributions

In ordering an equitable distribution, a trial court must classify property as

marital, divisible, or separate, identify the net value of the marital and divisible

property, and make an equitable distribution of that property. Cunningham v.

Cunningham, 171 N.C. App. 550, 555, 615 S.E.2d 675, 680 (2005); Hamby v. Hamby,

143 N.C. App. 635, 638, 547 S.E.2d 110, 112 (2001).

1. Classification of Property

This Court will not disturb a trial court’s property classification if competent

evidence supports the determination. Smith, 387 N.C. at 258, 912 S.E.2d at 765.

Marital and divisible property must be divided equally unless a court decides

that an equal distribution would be inequitable. Hamby, 143 N.C. App. at 638, 547

S.E.2d at 112; Davis v. Davis, 360 N.C. 518, 527, 631 S.E.2d 114, 120 (2006). Separate

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property is not included in the equitable distribution. Crowell v. Crowell, 372 N.C.

362, 368, 831 S.E.2d 248, 252 (2019).

Marital property encompasses all presently owned real and personal property

acquired by at least one spouse during marriage and before separation. N.C. Gen.

Stat. § 50-20(b)(1) (2023). Separate property, conversely, includes real or personal

property acquired by a spouse before marriage and property acquired by a spouse by

devise, descent, or gift during the marriage. N.C. Gen. Stat. § 50-20(b)(2).

Additionally, income derived from separate property is separate property. Id.

Divisible property includes appreciation and diminution of marital and divisible

assets after the date of separation and before the date of distribution (unless such

change in value is a consequence of postseparation conduct), any portion of property

or property rights received after the date of separation and before the date of

distribution that was acquired as a result of efforts made during the marriage and

before the separation (i.e. commissions, bonuses, and contractual rights), passive

income received after the date of separation from marital property, and passive

changes in marital debt, financing charges, and marital debt interest. N.C. Gen. Stat.

§ 50-20(b)(4).

“‘[A]ll appreciation and diminution in value of marital and divisible property

is presumed to be divisible property unless the trial court finds that the change in

value is attributable to the postseparation actions of one spouse.’” Cheek v. Cheek¸

211 N.C. App. 183, 184, 712 S.E.2d 301, 303 (2011) (citation omitted). Appreciation

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in the value of marital property caused by postseparation conduct shall be excluded

from divisible property. N.C. Gen. Stat. § 50-20(b)(4)(a).

Debt is considered marital debt when it is “incurred during the marriage and

before the date of separation” by at least one spouse “for the joint benefit of the

parties.” Riggs v. Riggs, 124 N.C. App. 647, 652, 478 S.E.2d 211, 214 (1996).

Separate property rental property may wholly retain its separate property

status when separate property rental income paid mortgage payments, taxes,

insurance, and repairs. Watkins v. Watkins, 228 N.C. App. 548, 559, 746 S.E.2d 394,

401 (2013). Additionally, property acquired by an exchange of separate property is

separate property. Crumbley v. Crumbley, 70 N.C. App. 143, 145, 318 S.E.2d 525,

526 (1984).

There is a distinction between active and passive appreciation in property

classification and valuation. See Fountain v. Fountain, 148 N.C. App. 329, 333, 559

S.E.2d 25, 29 (2002). The appreciation of separate property due to an active increase

in the property’s value is marital property. Id. Active increases include increases in

value due to substantial financial and managerial contributions from the marital

estate. Id. Passive appreciation of separate property, such as inflation and changing

economic conditions, remains separate property. Id; O’Brien v. O’Brien, 131 N.C.

App. 411, 420, 508 S.E.2d 300, 306 (1998). A trial court must classify each type of

appreciation appropriately, by evidential support and findings of fact. Ciobanu v.

Ciobanu, 104 N.C. App. 461, 466–67, 409 S.E.2d 749, 752–53 (1991).

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There is a presumption “that all property acquired after the date of marriage

and before the date of separation is marital property except” intentionally stated gifts

from the other spouse, licenses, exchanged separate property without contrary stated

intent, an increase in value and income from separate property, and inheritance or

gifts from a third party. N.C. Gen. Stat. § 50-20(b)(1)-(2). This “presumption may be

rebutted by the greater weight of the evidence.” N.C. Gen. Stat. § 50-20(b)(1). The

party championing for a specific property classification must show by a

preponderance that the property falls within the certain classification. Power v.

Power, 236 N.C. App 581, 586, 763 S.E.2d 565, 569 (2014) (citation omitted). After a

party meets their burden of proof showing a specific classification, the burden shifts

to the opposing party to demonstrate a different classification. See Fountain, 148

N.C. App. at 332–33, 559 S.E.2d at 29. If both parties meet their burdens of proof by

a preponderance, then the property is deemed separate property. Id. at 333, 559

S.E.2d at 29.

a. Townhome 1031 Exchange Appreciation

Here, based on the finding the South Carolina townhome was partially

separate and partially marital property, the trial court found the North Carolina

townhome partially separate and partially marital property, as well. Defendant

purchased a townhome in South Carolina prior to the marriage, and, after getting

married, exchanged the South Carolina property for a townhome located in North

Carolina. Defendant claims the South Carolina townhome was separate property

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because it was purchased before the marriage. Further, Defendant contends, since

exchanges of separate property remain separate property, the trial court

misclassified the North Carolina townhome as partially marital.

Defendant is correct that property acquired before marriage is generally

separate property and that separate property exchanged for other property retains

its separate property status. However, evidence in the record shows the South

Carolina townhome, despite being acquired prior to the marriage, operated at a loss

for multiple years during the marriage. Consequently, the townhome was consuming

marital property to fund its upkeep. Furthermore, during the marriage, the South

Carolina townhome needed maintenance work and renovations. This record evidence

supports the trial court’s finding that the South Carolina townhome is partially

marital property. This Court need not reweigh the evidence. Since the trial court

found the South Carolina townhome was partially marital based upon competent

record evidence, Defendant’s argument that the 1031 exchange involved solely

separate property fails.

b. Vanguard Individual Account

Defendant claims the trial court did not classify the passive increase of

Plaintiff’s Vanguard individual account from date of separation to the date of trial.

Defendant espouses that Plaintiff’s individual account’s gains were passive and not a

result of Plaintiff’s postseparation conduct, and as such the trial court should have

classified it as divisible property. However, Plaintiff provided evidence that the

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increase in the value of the Vanguard account was a result of an interim distribution

less expenses such as bill payments and tax liabilities and penalties. Thus, based on

competent evidence, the trial court found the increase in funds in the Vanguard

account was not passive, but rather a result of an interim distribution. Therefore,

the court concluded the increase was not divisible property. Thus, we affirm.

c. Forte Account

Defendant argues the trial court erred by classifying his Forte account as

marital property. Defendant testified the funds in his Forte account came from an

inheritance from his mother. However, when asked to trace his inheritance within

the account at trial, Defendant was unable to do so with the documents that he had

at trial. Although tracing may not be necessary, the trial court based its finding on

Defendant’s lack of ability to prove his inheritance at trial. A reasonable mind could

accept the lack of tracing documentation as adequate to support the finding that

Defendant’s account is not separate property. Consequently, the finding is supported,

and the trial court did not err.

d. 2018 Tax Liability

Defendant claims the trial court erred in classifying Plaintiff’s 2018 tax

liability as marital debt. Defendant argues Plaintiff failed to meet her burden of proof

as to the tax liability’s occurrence taking place prior to separation. Nevertheless,

Plaintiff provided testimony supporting that the portion of liability was for the 2018

tax returns—the same year of the separation.

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Defendant also argues Plaintiff did not demonstrate how the debt benefited

the marriage, a requirement for marital debt classification. Plaintiff presented her

heightened tax liability for 2018, the result of not filing jointly with Defendant.

Considering Defendant and Plaintiff as a married couple, before separation, filing

jointly would have benefited both parties together. The trial court relied in part on

Plaintiff’s substantiated evidence of bank statements and records. This

documentation meets the standard of competent evidence. We affirm the

classification of this debt.

e. UBS Account

Plaintiff argues the trial court incorrectly found Defendant’s use of his UBS

account containing stock options from his employer as marital property. She points

to Defendant’s partial individual use of such funds to pay for lawyers. However,

Defendant provided evidence that he used the funds for their children’s 529 accounts,

taxes due on their homes, credit card payments, and payments to the IRS. A

reasonable person could find that such expenses adequately support a finding that

these funds were used for marital purposes.

While there was evidence of Defendant using the UBS funds for individual use,

specifically for lawyers in preparation of separation, there is also competent evidence

to support the trial court’s finding that the funds were used for marital purposes.

Thus, we affirm.

f. Marital Cash Funds

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Plaintiff asserts the trial court erred in treating a withdrawal of $8,100 as

marital funds. Although there is no evidence pointing to the origin of these funds,

circumstances suggest these funds were acquired during the marriage because the

couple had been together for many years. Further, the withdrawal did not appear to

come from a separate property account. Plaintiff would have needed to prove by a

preponderance that these cash funds were separate property. However, Plaintiff

failed to provide any evidence as to how these funds were used and the presumption

is that property acquired during the marriage is marital. Therefore, the trial court’s

finding that the $8,100 withdrawal was marital funds is affirmed.

2. Valuation of Property

If a trial court’s valuations of property are supported by evidence, the findings

regarding value are conclusive on appeal despite contrary evidence. Pellom v. Pellom,

194 N.C. App. 57, 66–67, 669 S.E.2d 323, 328 (2008) (citation omitted).

The net value of the marital property is the fair market value of such property

less any liabilities on that property. Hamby, 143 N.C. App. at 638, 547 S.E.2d at 112.

When both marital and separate estate assets are used to acquire property, then each

estate attains an interest in the property that is proportional to its contribution.

Brackney v. Brackney, 199 N.C. App. 375, 384, 682 S.E.2d 401, 407 (2009) (citation

omitted).

Lay persons may testify to the value of property if that person can demonstrate

knowledge of the property and some basis for the opinion offered. Finney v. Finney,

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225 N.C. App. 13, 16, 736 S.E.2d 639, 642 (2013) (citation omitted). Generally, owners

have this type of knowledge and basis for such testimony. Id. Nevertheless, if there

is an affirmative appearance that an owner lacks knowledge of the property’s market

value, then the owner may not be competent to testify. Hill v. Sanderson, 244 N.C.

App. 219, 232, 781 S.E.2d 29, 39 (2015) (citation omitted). Furthermore, if the person

testifying to the value of a property admits a lack of knowledge as to the property

valuation, then such testimony will be excluded and cannot support a finding of fact.

Id.

a. South Carolina Townhome 1031 Exchange for North Carolina Townhome

The trial court made a finding of fact as to the appreciated value of the North

Carolina townhome based on Plaintiff’s testimony. Defendant claims the trial court

erred in its valuation of the exchanged townhome claiming Plaintiff was not

competent to testify as to that valuation. Defendant points to evidence that Plaintiff

was never an owner of the property and, therefore, alleges Plaintiff did not have

specific knowledge regarding the value of the NC townhome. Defendant did not

testify to the value of the townhome.

Plaintiff was indeed not listed on the title of the townhome. Defendant is

correct that an owner is generally assumed to have competency to testify as to the

property’s value. However, a person is not required to be an owner to possess

knowledge of the property and some basis for his/her opinion. Furthermore, although

Plaintiff admitted that she lacked specific knowledge as to the total amount of marital

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proceeds spent on the upkeep of both the South Carolina and North Carolina

townhomes, she did not demonstrate an affirmative lack of knowledge as to the

appreciated value of the property. Plaintiff’s testimony is competent evidence.

The trial court valued the townhome’s portion of marital property as the

amount paid towards the mortgage. Plaintiff and Defendant both argue the trial

court incorrectly determined the portion of the property that was marital, each party

pointing to different considerations that the trial court should have supposedly

weighed more (i.e. renovations and rental income payments towards the mortgage).

Nevertheless, the trial court’s findings were supported with competent evidence that

the couple had paid down part of the mortgage during their marriage. See Beightol

v. Beightol, 90 N.C. App. 58, 60–62, 367 S.E.2d 347, 349–50 (1988) (holding that the

wife was entitled to marital interest in the rental property acquired by the husband

before marriage as the wife helped with the property and contributed marital funds

to it). We affirm the trial court’s valuation of the North Carolina townhome.

Defendant claims the trial court failed to value the passive increase of

Plaintiff’s Vanguard individual account from the date of separation to the date of

trial. However, because we affirm the trial court’s finding that the increase in the

Vanguard account was not divisible, the question is moot.

c. Jeep Vehicle

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Plaintiff and Defendant testified as to different amounts for the value of a Jeep.

The trial court’s finding of fact concluded that Defendant’s testimony of the Jeep’s

fair market value was credible. Plaintiff argues Defendant’s testimony, based upon

a Carfax report, was too dated to be accurate. Despite contrary evidence, the trial

court’s finding was supported by competent evidence. Johnson, 117 N.C. App. at 413,

450 S.E.2d at 926.

d. 401K/Retirement Account

Plaintiff argues the trial court incorrectly valued Defendant’s 401k/Retirement

account because of Defendant’s lack of evidence to support his summary exhibit and

the trial court’s failure to calculate gains and losses on funds deposited and

withdrawn after the date of separation. Plaintiff claims the data does not support

Defendant’s compilation. In his testimony, Defendant acknowledged that he had

made an error and then corrected his exhibit. Even though Plaintiff may point to

controverting evidence in support of her claim that the trial court’s valuation was

incorrect, the trial court’s finding of fact is supported by evidence in the record,

including Defendant’s testimony. Therefore, we give deference to the trial court’s

finding as a reasonable person may have found Defendant’s testimony along with

supporting exhibits adequately acceptable in support of such a finding.

e. Peninsula Yacht Club Membership

Defendant acquired a Peninsula Yacht Club Membership during Plaintiff and

Defendant’s marriage. The trial court found that neither party offered evidence that

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the couple’s Peninsula Yacht Club Membership was in existence on the date of

separation; thus, the trial court claimed it could not distribute it. However, the trial

court erred in making this finding of fact. Both Plaintiff and Defendant offered

evidence of the membership’s existence in their testimonies. Defendant testified he

stopped being a member at least a couple years after the date of separation. This

would make Defendant and his family members as of the date of separation.

Furthermore, Plaintiff testified as to the value of the yacht club membership when it

was purchased as well as the value as of the date of separation. Thus, the trial court

erred in finding that no evidence showed that the membership existed then.

3. Distribution of Property

When the trial court decides that equal division of property is not equitable,

the court must divide the marital and divisible property equitably. N.C. Gen. Stat. §

50-20(c) (2023). To divide such property equitably, the trial court must consider

certain factors for each party along with any other factor the court deems just and

proper. Id. The factor applicable to this case is “[t]he income, property, and liabilities

of each party at the time the division of property is to become effective.” Id.

Furthermore, all liabilities, not just marital ones, are to be considered by the trial

court. Geer v. Geer, 84 N.C. App. 471, 475, 353 S.E.2d 427, 429 (1987). Lastly, in the

distributional factors analysis, the trial court must include all appropriate findings

of fact as to the distributional factors. Smith v. Smith, 247 N.C. App. 135, 161, 786

S.E.2d 12, 31 (2016). It is inadequate if the trial court does not consider the relevant

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findings as distributional factors, even if the trial court makes other findings of fact

as to the certain matter. Id.

a. Vanguard Individual Account

Defendant asserts the trial court failed to distribute the passive increase of

Plaintiff’s Vanguard individual account from date of separation to the date of trial.

The trial court did not err by excluding the alleged passive increase in value to the

Vanguard account from its distribution because we affirm its separate property

classification.

b. 401K/Retirement Account

Plaintiff claims the trial court incorrectly distributed the 401k/Retirement

account to Plaintiff and Defendant. Plaintiff argues the trial court erred in failing to

apply gains and losses to all deposits and withdrawals after the date of separation.

In turn, Plaintiff claims, the trial court inaccurately distributed the funds from the

401k/Retirement account. Nevertheless, Defendant testified to the amounts and

occurrences of his withdrawals and deposits after the date of separation. The trial

court’s findings of fact regarding the distributions are supported by competent

evidence, Defendant’s testimony.

c. Distributional Factors

Defendant contends the trial court did not sufficiently consider his separate

debt in the distribution of assets. Defendant claims the trial court failed to include

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his separate debt and Plaintiff’s separate funds in her Vanguard individual brokerage

account.

We disagree with Defendant’s claim that the trial court failed to consider

Plaintiff’s Vanguard individual brokerage account. Although not mentioned by name,

the Vanguard individual brokerage account may be included in the trial court’s

consideration of Plaintiff’s “other investments.”

We agree with Defendant’s claim that the trial court failed to include

Defendant’s separate credit card indebtedness. Although the trial court did make

findings of fact pertaining to the liability prior to the distributional factor analysis,

the lack of inclusion of the debt in the distribution analysis is inadequate. Thus, this

Court remands the case to the trial court to reanalyze the distribution with

consideration of Defendant’s debt.

III. Conclusion

In conclusion, we affirm the trial court’s order as to its classification of both

the South Carolina and North Carolina townhomes, the Vanguard account, the Forte

account, the 2018 tax liability, the UBS account, and the $8,100 cash withdrawal.

Furthermore, we affirm the trial court’s order as to its valuation of the North

Carolina townhome, the Jeep, and the 401k/Retirement account. However, we

remand for valuation of the Peninsula Yacht Club Membership.

We affirm the distributions of Defendant’s 401k/Retirement account. Lastly,

we affirm the trial court’s consideration of Plaintiff’s funds in her Vanguard

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account, but remand for consideration of Defendant’s separate credit card debt. The

trial court may hear additional evidence in its discretion.

AFFIRMED IN PART; REMANDED IN PART.

Judges GORE and STADING concur.

Report per Rule 30(e).

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