Sternola v. Aljian

• Court: Court of Appeals of North Carolina
• Decided: March 19, 2024
• Docket: 23-266
• Status: Published

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA23-266

Filed 19 March 2024

Union County, No. 17CVD2215

LORI NICOLE STERNOLA, Plaintiff

v.

MARK DONOVAN ALJIAN, Defendant.

Appeal by defendant from judgment entered 4 August 2022 by Judge

William F. Helms III in Union County District Court. Heard in the Court of Appeals

21 February 2024.

Emblem Legal, PLLC, by Stephen M. Corby, for the plaintiff-appellee.

Connell & Gelb PLLC, by Michelle D. Connell, and The Honnold Law Firm, P.A., by Bradley B. Honnold, for the defendant-appellant.

TYSON, Judge.

Mark Donovan Aljian (“Defendant”) appeals from an order on permanent child

support and adjudication of arrears. We reverse and remand.

I. Background

Defendant and Lori Nicole Sternola (“Plaintiff”) met in Los Angeles in 1998,

moved to London, England in 2001, and were married on 1 June 2002. They

separated in February 2011 and later divorced. Plaintiff is a citizen of the United

States. Defendant is a dual citizen of the United States by birth and a naturalized STERNOLA V. ALJIAN

Opinion of the Court

citizen of the United Kingdom.

Plaintiff and Defendant are parents of three children: KMA, born September

2001; M-MA, born March 2003; and, RTA, born May 2006. All three children were

born while the parties resided in the United Kingdom and hold dual United States

and United Kingdom citizenships.

Since separation in 2011, Plaintiff and Defendant have shared custody of their

then minor children with Plaintiff having nine overnights and Defendant having five

overnights every two weeks. The Central Family Court in London (“London Court”)

entered an order 13 December 2011 addressing property division, alimony, and child

support.

The London Court entered an order allowing their teenager, KMA, to move

with Plaintiff to the United States on 29 April 2015. Defendant retained custody of

the other two children in London. Plaintiff and KMA moved to Waxhaw, in July 2015.

Defendant, M-MA, and RTA remained in London.

The London Court entered an order addressing the cost apportionment of

orthodontic treatment for the children and for reimbursement of air travel for the

children. The London Court also entered an order on 9 August 2017 which allowed

Defendant to move with M-MA and RTA to Los Angeles, California.

Plaintiff took custody of M-MA and RTA in August 2017 and kept them in

Waxhaw in violation of the custody order. The London Court entered an order

requiring her to return to the United Kingdom on 14 September 2017. Plaintiff

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appealed this order in the United Kingdom. Plaintiff also filed a complaint in Union

County for temporary and permanent child custody and motions for emergency child

custody, assumption of jurisdiction, and for attorneys’ fees. Defendant filed a petition

to register and enforce a foreign custody order on 4 October 2017. The district court

entered a temporary child custody order on 14 November 2017, which ordered a

status report of proceedings in the London Court.

The London Court entered an order on 22 December 2017 after both parties

had moved to the United States. Plaintiff was living in North Carolina, and

Defendant was living in California. The order also set out Plaintiff’s and Defendant’s

visitation schedule with their children. Mother amended her complaint adding

claims for prospective and retroactive child support on 18 May 2018.

Defendant was involuntarily terminated from his employment with the Hong

Kong and Shanghai Banking Corporation on 25 July 2019 due to his position being

eliminated. Defendant received a one-year severance equal to his salary following

termination. Defendant moved to Charlotte to be nearer to the children in October

2019.

The district court held a hearing on child support on 12 October 2020. The

oldest child had reached eighteen years old at the time of the hearing, and the other

children were seventeen and fourteen years old. Almost two years later, the district

court entered an order on permanent child support and adjudication of arrears on 4

August 2022 finding, inter alia, Defendant’s child support obligation was $2,000 per

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month, and he owed $32,296 in unpaid support arrears to Plaintiff. Defendant

appeals.

II. Jurisdiction

This Court possesses jurisdiction pursuant to N.C. Gen. Stat. § 7A-27(b)(2)

(2023).

III. Issues

Defendant argues the district court erred by: (1) using speculative,

unsubstantiated, and incompetent evidence to impute and determine his income; (2)

imputing income in the absence of evidence of bad faith suppression of income to avoid

paying child support; (3) ordering him to pay arrearage of $32,296; and, (4) denying

his due process rights by delaying entry of the order for over 21 months after hearing.

IV. Findings of Fact

Defendant argues the district court erred by using speculative, unsubstituted,

and incompetent evidence to impute and determine his income.

A. Standard of Review

Generally, the trial court’s decision regarding child support is:

left to the sound discretion of the trial judge and will not be disturbed on appeal unless there has been a manifest abuse of that discretion. When the trial court sits without a jury, the standard of review on appeal is whether [substantial] , , , evidence support[s] the trial court’s findings of fact and whether its conclusions of law were proper in light of such facts.

Williamson v. Williamson, 217 N.C. App. 388, 390, 719 S.E.2d 625, 626 (2011)

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(citations and quotation marks omitted).

A trial court abuses its discretion when it renders a decision that is “manifestly

unsupported by reason or one so arbitrary that it could not have been the result of a

reasoned decision.” Briley v. Farabow, 348 N.C. 537, 547, 501 S.E.2d 649, 656 (1998)

(citations omitted). We review conclusions of law de novo. Farm Bureau v. Cully’s

Motorcross Park, 366 N.C. 505, 512, 742 S.E.2d 781, 786 (2013).

B. Analysis

Defendant challenges the following findings of fact:

17. Father has had a successful banking career and has attained a superior education, with an undergraduate and masters degrees (sic) from Ivy League schools;

18. Since 2011, Father has borrowed money from his mother for litigation expenses and living expenses. The terms of these loans were extremely favorable to Father. The Promissory Notes from 2011-2020 obligate Father to pay interest only, with interest rates from 1.51% to 2.5%. These interests (sic) rates were at all times below the Bank Prime lending rate, which ranged from 3.25% to 5.5% during this time period, per the Federal Reserve Bank and the Wall Street Journal.

...

23. The Charlotte area is well-known as a banking center, and public data from the Bureau of Labor Statistics indicates substantial employment opportunities in banking and finance.

The record indicates Defendant received degrees from the University of

California, Los Angeles (“UCLA”). At the time of the hearing and the time of this

opinion, UCLA is a member of the Pac-12 Conference, and scueduled to join he Bit

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Ten Conference on 2 August 2024. The Ivy League is a conference of eight schools

located in the Northeastern United States. UCLA has been referred to as a “public

ivy” by Richard Moll in Public Ivies: A Guide to America’s Best Public Undergraduate

Colleges and Universities and Howard and Matthew Greene in The Public Ivies:

America’s Flagship Public Universities. Although UCLA has been referred to by some

as a “public ivy,” it is not in the Ivy League conference.

Defendant testified the debt he incurred to his mother was spent on litigation

expenses. (“It’s entirely gone to litigation.”). Unchallenged findings of fact show

Defendant received a purchase money loan in the amount of $663,000.00 with an

interest rate of 1.51%.

Defendant further argues the district court erred in taking purported judicial

notice of “substantial opportunities in banking and finance” to exist after Defendant

testified a bank in Charlotte was undergoing layoffs and restructuring. The evidence

presented by Defendant was contradictory to the finding of which the district court

had received no other evidence, but which determined by taking judicial notice.

North Carolina General Statutes allow courts to take judicial notice of

adjudicative facts, which are “not subject to reasonable dispute in that [they] are

either (1) generally known within the territorial jurisdiction of the trial court or (2)

capable of accurate and ready determination by resort to sources whose accuracy

cannot reasonably be questioned.” N.C. Gen. Stat. § 8C-1, Rule 201(b) (2023). The

Official Commentary to N.C. Gen. Stat. § 8C-1, Rule 201(b) provides: “With respect

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to judicial notice of adjudicative facts, the tradition has been one of caution in

requiring that the matter be beyond reasonable controversy.” N.C. Gen. Stat. § 8C-

1, Rule 201(b) N.C. Commentary (2023).

In Thompson v. Shoemaker, 7 N.C. App. 687, 690, 173 S.E.2d 627, 630 (1970)

this Court denied a request to take judicial notice “of the scarcity of low income

housing in the City of Charlotte[,]” because “the unavailability of low income housing

in Charlotte is undoubtedly subject to debate and in our opinion it is not a factor that

can be judicially noticed by this court.” Id.

This Court in Hinkle v. Hartsell, 131 N.C. App. 833, 837, 509 S.E.2d 455, 458

(1998), applied the holding in Thompson in a custody case where the trial court took

purported judicial notice that an area of Charlotte was a “high crime area.” This

Court held this finding was also error because “the prevalence of crime in and about

the premises of the [Charlotte neighborhood], and how this crime affects the safety of

its residents, is no doubt a matter of debate within the community.” Id.

In the absence of substantial competent evidence, the trial court erred in

finding by purportedly “judicially noticing” there were “substantial employment

opportunities in banking and finance.” Because the findings challenged by Defendant

where the district court took judicial notice are crucial to the ultimate determination

of the district court, the order of the district court is vacated. In light of our vacating

the trial court’s order, we need not address Defendant’s remaining arguments, other

than the imputation of Defendant’s capacity to earn income, which may recur on

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remand. We address this argument.

V. Imputing Income

Defendant argues the trial court erred in imputing income to him.

“Child support orders entered by a trial court are accorded substantial

deference by appellate courts and our review is limited to a determination of whether

there was a clear abuse of discretion.” Leary v. Leary, 152 N.C. App. 438, 441, 567

S.E.2d 834, 837 (2002). When this Court reviews for an abuse of discretion:

the trial court’s ruling will be overturned only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision. The trial court must, however, make sufficient findings of fact and conclusions of law to allow the reviewing court to determine whether a judgment, and the legal conclusions that underlie it, represent a correct application of the law.

Spicer v. Spicer, 168 N.C. App. 283, 287, 607 S.E.2d 678, 682 (2005) (citations

omitted).

Defendant argues the district court erred by imputing income after finding his

capacity or ability to earn “$20,000.00 per month or more and his failure to seek

employment in good faith.” Defendant argues no evidence exists of his bad faith

suppression of income to avoid paying child support.

N.C. Gen. Stat. § 50-13.4(c) determines child support payments and provides:

Payments ordered for the support of a minor child shall be

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in such amount as to meet the reasonable needs of the child for health, education, and maintenance having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, . . . and other facts of the particular case.

N.C. Gen. Stat. § 50-13.4(c) (2023).

Our Supreme Court has stated:

In determining the amount of . . . child support to be awarded the trial judge must follow the requirements of applicable statutes. . . . Ordinarily the husband’s ability to pay is determined by his income at the time the award is made if the husband is honestly engaged in a business to which he is properly adapted and is in fact seeking to operate his business profitably. Capacity to earn, however, may be the basis of an award if it is based upon a proper finding that the husband is deliberately depressing his income or indulging himself in excessive spending because of a disregard of his marital obligation to provide reasonable support for his wife and children.

Beall v. Beall, 290 N.C. 669, 673-74 228 S.E.2d 407, 410 (1976) (internal quotations

and citations omitted).

“Only when there are findings based on competent evidence to support a

conclusion that the supporting spouse or parent is deliberately depressing his or her

income or indulging in excessive spending to avoid family responsibilities, can a

party’s capacity to earn by considered.” Atwell v. Atwell, 74 N.C. App. 231, 235, 328

S.E.2d 47, 50 (1985) (citations omitted).

A trial court may only impute capacity to earn income to base an award of child

support after the trial court has found the parent has disregarded his parental

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obligations by:

(1) failing to exercise his reasonable capacity to earn, (2) deliberately avoiding his family’s financial responsibilities, (3) acting in deliberate disregard for his support obligations, (4) refusing to seek or to accept gainful employment, (5) wilfully (sic) refusing to secure or take a job, (6) deliberately not applying himself to his business, (7) intentionally depressing his income to an artificial low, or[,] (8) intentionally leaving his employment to go into another business.

Wolf v. Wolf, 151 N.C. App. 523, 526-27, 566 S.E.2d 516, 518-19 (2002).

This Court has held “evidence of a voluntary reduction in income is insufficient,

without more, to support a finding of deliberate income depression or bad faith.”

Pataky v. Pataky, 160 N.C. App. 289, 307, 585 S.E.2d 404, 416 (2003) (citations

Defendant’s employment was involuntarily terminated in June 2019, as his

position with the company was eliminated. Defendant was given a severance package

of one year’s salary on 25 July 2019. Defendant presented evidence he had moved

from Los Angeles to Charlotte to be closer to his children and to begin learning new

skills to expand the potential pool of employers. The evidence presented to the trial

court was Defendant had submitted many applications seeking employment in

Charlotte and was not refuted. Defendant did not act in a willful disregard for his

support obligations. Id. None of the other Wolf factors apply. Wolf, 151 N.C. App. at

526-27, 566 S.E.2d at 518-19. The district court erred in imputing capacity to earn

income to Defendant.

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VI. Conclusion

At least two of the parties’ children have reached the age of majority and the

other will reach the age of majority later this year. The district court abused its

discretion in taking judicial notice of purported undisputed adjudicative facts

pertaining to the job market in banking and finance in the Charlotte metropolitan

area. The district court also erred in imputing capacity to earn income to Defendant

by improperly finding without a basis that he had acted in bad faith to depress his

income.

Canon 3B(1) of the North Carolina Code of Judicial Conduct requires a judge

to “diligently discharge the judge’s administrative responsibilities[.]” The prejudice

to the parties by the delay in filing the order is obvious. Upon remand, the district

court is to make findings of fact to explain the twenty-one month delay after hearing

in the entry of the prior order.

The permanent order is vacated and remanded for further proceedings. It is

so ordered.

VACATED AND REMANDED.

Judges MURPHY and WOOD concur.

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