Family Law Update ED and 50B Cheryl Howell Institute of Government 2003

ED & Death Before S.L (l): A pending action does not abate upon death of party –Overruling Brown v. Brown, 353 NC 220 (2000) Applies to all actions pending or filed after Aug. 10, 2001 –Bowen v. Mabry, NC App (Dec. 2002)(no abatement even though death occurred before effective date of statute)

Death & ED Before S.L As a distribution factor, ED court should consider property passing to surviving spouse because of: –A will or intestacy laws; –Tenancy by the entirety or other right of survivorship; –Life insurance or retirement accounts; and –Surviving spouse’s claim of right to an elective share pursuant to GS 28A-30, unless waived

ED & Death S.L (l): claim for ED survives – whether filed or not – if parties live separate and apart at death Probably applies to claims filed on or after June 12, 2003 –See Morris v. Morris, 79 N.C. App. 386 (statutes that do not say otherwise are presumed to apply prospectively only), unless procedural – see Gardner v. Gardner, 300 NC 715. –But see Brown v. Mabry, id.

ED & Death 50-20(l)(2): provisions of GS 28A Article 19 apply to claims for ED against an estate Death is a distribution factor in ED? –GS 50-20(c)(11b) unchanged by S 394 –See also Tucker v. Miller, 113 NC App 785 (1994)

Death of party in pending case Estate/personal representative should be substituted and case should proceed –See Tucker v. Miller, id. But see Swindell v. Lewis, 82 NC App 423 (1986)(heirs are necessary parties)

Substitution of Estate GS 1A, Rule 25 Substitution made “on motion at any time within time specified for presentation of claims in GS 28A-19-3.” –Generally 3 months after notice to creditors Conditional order of abatement –Upon motion and notice “to such persons as the court directs” –Action abates on specific date not less than 6 nor more than 12 months after order –Unless proper party continues action

Claims filed after death Parties must have lived separate and apart at time of death Claims by estate must be filed within 1 year of death Claims by surviving party: –Must be presented to estate within time limits of 28A-19-3 –Once presented, must be filed within 3 months following rejection of claim by the estate

ED & Death Personal representative can enter into settlement agreement. GS 28A-19-19(b) Estate and surviving party can agree to use reference pursuant to GS 28A Reference results in order binding on the estate ED claim satisfied by estate in accordance with priority of claims in GS 28A-19-6 ? –A distribution factor?

Postseparation payment of marital debt Hay v. Hay, 148 NC App 649 (2002) –Postseparation payment of mortgage did not result in divisible property Treatment of payments within discretion of the court – no dollar-for-dollar credit required –Court can give credit, order repayment, or treat as distribution factor

Divisible property (at time of Hay decision) 50-20(b)(4). Postseparation –Appreciation/depreciation of marital property not caused by efforts of a spouse –Property acquired as the result of efforts before date of separation –Passive income received from marital property –Increases in marital debt and financing charges and interest related to marital debt

Divisible property S.L , sec (b)(4). Postseparation –Appreciation/depreciation not caused by efforts of a spouse –Property acquired as the result of efforts before date of separation –Passive income received from marital property –Increases and decreases in marital debt and financing charges and interest related to marital debt

Divisible property S.L , sec Probably only applies to cases filed on or after October 11, 2002 –See Morris v. Morris, 79 NC App 386 (1986)(amendments presumed to have prospective application if statute doesn’t say) and Armstrong, 322 NC 396 (1988)(no constitutional problems if apply prospectively) Hay will continue to apply to cases filed before October 11, 2002

Example (self-test) After DOS, plaintiff lives in marital home and makes mortgage payments Monthly payment includes $800 principle and interest, and $250 taxes and insurance escrow During separation, mortgage balance reduced by $5,000

Under Hay No divisible property Distribution factors: –Plaintiff’s use of residence –Increase in value of marital home caused by plaintiff’s efforts –Plaintiff’s payments (or can give “Credit”)

Under S.L , sec Divisible property –$5,000 decrease in marital debt Distribution factors –Plaintiff’s use of marital residence –Increase in value of marital residence –Plaintiff’s payment of escrow and interest (or can give “credit”)

Example (self-test) Credit card debt of $2,500 on DOS: all marital By DOT, debt total is $3,000: no new charges made during separation Plaintiff has made minimum monthly payment of $25 per month for a total of $600.

Before S.L , sec Divisible property –Increase in marital debt and finance charges and interest related to marital debt: $500 Distribution factors –Plaintiff’s payment of credit card debt. See Hay, 148 NC App 649 (2002)(or can give “credit”)

After S.L , sec Divisible property –Increase in marital debt and finance charges and interest related to marital debt: $500 –Decrease? Only if decrease in debt shown to result from monthly payments Distribution factors –If no decrease found, plaintiff’s payment of the debt (or give “credit”)

Inventory Affidavits GS 50-21(a) Franks v. Franks, 153 NC App 793 (2002) –Plaintiff’s affidavit listed value of defendant’s business as “unknown” –Plaintiff not bound by her affidavit at trial even though she did not amend or supplement the affidavit once she obtained expert opinion as to value –GS 50-21(a) states affidavits “shall not be binding at trial as to completeness or value.”

Distributive Awards Embler v. Embler (COA July 2003) –Defendant ordered to pay $24,876 within 60 days –COA held trial court erred by not identifying how defendant would satisfy award where defendant had no “obvious liquid assets.” See also Shaw v. Shaw, 117 NC App 552 (1995) –Ability to pay is not the issue

Distributive Awards Embler v. Embler If court cannot identify liquid assets to pay award, must identify non-liquid source of funds –Ex. retirement funds or loans If non-liquid source used, court must consider “adverse financial ramifications” as distribution factors –50-20(c)(9): must consider liquid/non-liquid character of assets –50-20(c)(11): must consider tax consequences of distribution

Equitable Distribution Pension classification Award of pension determined using proportion of time marriage existed (up to date of separation), simultaneously with employment which earned the pension, to the total amount of time of employment. –GS (d) Referred to as the “coverture fraction” –Bishop, 113 NC App 725 (1994) –Lewis, 83 NC App 438 (1986)

Pension classification Embler v. Embler –Entire pension classified as marital even though 8 years (1/3 of total in this case) accumulated before marriage because defendant failed to introduce evidence of the value of the pension on the date of marriage –Compare Gagnon, 149 NC App 194 (2002) and Atkinson v. Chandler, 130 NC App 561 (1998) – both holding coverture fraction is required even when value actually earned by pre-marital effort.

Domestic Violence Renewal of 50B: S.L amends 50B- 3(b) –Effective 5/31/03 Court may renew order up to 1 year, including orders previously renewed, on motion filed before expiration of current order Court may renew for good cause –New act of domestic violence not required

Domestic Violence Basden v. Basden, UNPUBLISHED –Court of appeals 12/03/02 –Order renewing protective order must contain findings of fact and conclusions of law –Use present AOC form CV-314 with caution

S.L “An Act to Enhance the Safety of Victims in Serious Domestic Violence Cases” Creates new section G.S 50B-3.1: “Surrender and disposal of firearms” Applies to offenses committed on or after Dec. 1, 2003

Overview: 50B-3.1 When court enters a 50B order, Defendant must surrender firearms if court finds one of the factors set out in 50B-3.1(a) Sheriff cannot return firearms without a court order Court cannot order return if federal or state law prohibits defendant from possessing firearms Class H felony to violate non-possession order

50B-3.1(a) factors Use or threatened use of deadly weapon by defendant [against plaintiff or child?] or a pattern of conduct involving use or threatened use of violence with a firearm against persons Threats to seriously injure or kill plaintiff or child by defendant Threats to commit suicide by defendant, or Serious injury inflicted on plaintiff or child by defendant

50B-3.1(a) If court finds one factor, it shall order surrender of all firearms, machine guns, ammunition, permits to purchase firearms or to carry concealed weapons, that are in the care, custody, possession, ownership, or control of defendant

Official Use Exemption 50B-3.1(k) Law enforcement and military personnel – not otherwise prohibited by federal law – are not prohibited from possessing or using firearms for official use only

Retrieval 3 rd Party Owners 3 rd party owner must file motion not later than 30 days after seizure Court must order return to owner unless court finds 3 rd party is disqualified under state or federal law If court denies return, Sheriff must dispose of items [without further court order?]

Retrieval by defendant 50B-3.1(e) If court does not enter order when emergency or ex parte order expires, defendant can retrieve items unless court finds possession/ownership is precluded by state or federal law

Motion for Return 50B-3.1(f) Defendant requests return by filing motion when order expires, but no later than 90 days after expiration of order Upon filing, court shall schedule hearing and provide notice to plaintiff and Sheriff

Hearing for return 50B-3.1(f) Court shall determine whether: –Protective order has been renewed –Defendant is subject to other protective orders –Defendant is disqualified under 18 USC 922 or any state law Court must deny return if law prohibits defendant’s possession

Disposal of firearms 50B-3.1(h) Sheriff shall give notice to defendant and apply for an order of disposal if: –Defendant does not file timely motion for return of items; –Court determines defendant is precluded from possession; or –Defendant or 3 rd party owner fails to pay all storage fees within 30 days of retrieval order