IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA25-581
Filed 1 July 2026
Caldwell County, No. 19CVD001553-130
GARY BIDDLE, Plaintiff,
v.
SUVI HANNELE BIDDLE, Defendant.
Appeal by defendant from order entered 6 December 2024 by Judge Sherri W.
Elliott in District Court, Caldwell County. Heard in the Court of Appeals 18
November 2025.
LeCroy Law Firm, PLLC, by M. Alan LeCroy, for plaintiff-appellee.
Poyner Spruill LLP, by Steven B. Epstein, for defendant-appellant.
STROUD, Judge.
Suvi Hannele Biddle, Defendant, appeals from the trial court’s equitable
distribution order. She contends the trial court erred in the classification and
valuation of certain marital assets. She also argues that the trial court did not comply
with the parties’ binding stipulations and that it erred by placing the burden of proof
on her to show that gains in Plaintiff Gary Biddle’s separate assets during the
marriage should be classified as marital property. For the reasons below, we affirm
in part, vacate in part, and remand for entry of a new order.
I. Background
BIDDLE V. BIDDLE
Opinion of the Court
Gary Biddle (Husband) and Suvi Biddle (Wife) married 23 March 2011 and
separated 16 November 2019. In his complaint, Husband sought an equitable
distribution of the marital estate and a divorce from bed and board. On 12 September
2023, the parties entered into a Pretrial Order. A series of schedules containing
extensive stipulations were attached to the Pretrial Order. These stipulations: (1)
stated how the parties’ property would be classified, valued, and distributed; and (2)
set out the precise issues the court would decide with each respective schedule.
Schedule C of the Pretrial Order contained “a list of marital property upon
which there [wa]s [a]greement as to [v]alue and [d]isagreement as to [d]istribution.”
Included in this schedule was item A-1, the former marital home, with an agreedupon value of $1,100,000. Schedule C also included item L-1, the Monroe Medical
stock, with an agreed-upon value of approximately $877,000.
Schedule D contained a “list of marital property upon which there is
[d]isagreement as to [d]istribution and [d]isagreement as to [v]alue.” Schedule D
included a townhome that the parties owned in South Carolina.
Schedule E listed numerous accounts with which there was “[d]isagreement as
to [w]hether the item is [m]arital [p]roperty.” Included in this schedule were three
Charles Schwab investment accounts—Schwab #8193, Schwab #8773, and Schwab
#0407 (investment accounts)—which Husband owned prior to the marriage.
Schedule G contained “a list of items with [m]ixed, [m]arital and [s]eparate
[c]haracteristics.” Such item was a Wells Fargo Biddle’s Custom Homes Checking
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BIDDLE V. BIDDLE
Opinion of the Court
Account (Wells Fargo Checking Account), which Husband had opened before the
marriage. The parties agreed that the Wells Fargo Checking Account’s value was
$12,465, and Husband contended $5,447 of this amount was marital. Additionally,
Schedule G included the Charles Schwab #4691 IRA Rollover Account (Rollover
Account). Both parties agreed the Rollover Account’s value was approximately
$676,562, and Husband contended $255,495.29 of this amount was marital.
In summary, the parties made the following stipulations in the Pretrial Order:
• The parties agreed on the marital home and Monroe
Medical stock’s classification as marital property
and their respective date-of-separation values. They
disagreed as to the distribution of both.
• The parties agreed the townhome was marital
property but disagreed as to its distribution and
value.
• The parties agreed on the date-of-separation values
of each of the investment accounts but disagreed as
to whether any portion of each account was marital
property.
• The parties agreed that some portion of both the
Wells Fargo Checking Account and the Rollover
Account was marital but disagreed about how much.
The Pretrial Order also included, in Schedule H, Husband’s contentions for an
unequal distribution. Husband stated that he had purchased the townhome, listed
in Schedule D, with his own pre-marital funds for his daughter and grandsons when
they “became homeless.” Although the townhome was originally titled just to him,
Husband asserted “to maintain marital peace,” he had added Wife to the deed.
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Opinion of the Court
Husband also claimed he had made three loans totaling $105,000 to Wife’s daughter
and did not use any marital money.
On 5 January 2024, Husband filed a document entitled “Plaintiff’s Notice of
Amendment of his Equitable Distribution Affidavit and The Pretrial Order” (Notice).
In the Notice, Husband stated he had obtained a “new current appraisal” of
$1,175,000 for the former marital home and a separate “new current appraisal” of
$150,000 for the vacant lot across the street from the marital home, which the parties
also owned. Husband moved to amend “item A-1 of the Pretrial Order” with the
marital home and lot’s new total value (collectively, $1,325,000). He also stated he
was amending “item L-1 of the Pretrial Order” with a new value for the Monroe
Medical Stock ($1,003,663.89).
Wife filed “Defendant-Wife’s Response in Opposition to Plaintiff-Husband’s
‘Notice’ of Amendments and Motion in Limine,” (motion in limine) in which she
opposed the “amendments” to the Pretrial Order. Wife alleged that the Pretrial Order
could not be unilaterally “amended” by Husband but, instead, could be amended only
upon a proper motion and order under Rule 59 or Rule 60 of the North Carolina Rules
of Civil Procedure. See N.C. Gen. Stat. § 1A-1, Rule 59 (2025) (“New trials;
amendment of judgments); N.C. Gen. Stat. § 1A-1, Rule 60 (2025) (“Relief from
judgment or order”). Wife claimed Husband could not add the vacant lot with a
separate value from the marital home’s value. She moved in limine for the court “to
conduct a pre-trial hearing” and, pursuant to Rule 46 of the North Carolina Rules of
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BIDDLE V. BIDDLE
Opinion of the Court
Civil Procedure, that the trial court rule “as inadmissible any evidence regarding the
divisible v[ersus] marital nature of” the marital home or the vacant lot. See N.C. Gen.
Stat. § 1A-1, Rule 46 (2025) (“Objections”).
The equitable distribution hearing was held on three dates, beginning on 26
January 2024 and concluding on 2 July 2024. On the first day of the hearing, the
trial court addressed Husband’s Notice and Wife’s motion in limine. The court ruled
on Wife’s motion in limine and denied Husband’s request to value the marital home
and the lot as two separate parcels because the “parties combined that lot with the
house” in 2019. It determined the marital home’s value would include all the real
property at that location, including the lot. However, the trial court also ruled that
it would consider the marital home’s date-of-distribution value and would address
any divisible property based upon the evidence. The court also declared that
Husband would be allowed to present evidence of the Monroe Medical stock’s value.
Based on the trial court’s ruling, the parties stipulated to the Monroe Medical stock’s
date-of-trial value. The court denied Husband’s request to present evidence on an
outstanding loan and “a 2019 tax refund” because these items were not previously
listed.
During the hearing, the parties made certain oral stipulations: Husband and
Wife orally stipulated to the townhome’s $290,000 value and to the Wells Fargo
Checking Account’s $5,447 marital portion. Consistent with the court’s ruling at the
start of the trial, Husband presented evidence from an appraiser, who testified that
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BIDDLE V. BIDDLE
Opinion of the Court
the marital home’s fair market value was $1,275,000. The parties also put on
evidence regarding gains and losses in the investment accounts and the Rollover
Account. Husband testified about the frequency with which he traded investments
in each investment account. Husband also submitted Exhibit 15, wherein he tried to
trace out his separate assets in the Rollover Account.
On 13 December 2024, the trial court entered an equitable distribution order
(Order), concluding that an equal distribution was equitable and distributed the
parties’ property according to its findings. As to the items in Schedule C, the court
found that the marital home’s value had increased since 2019. “[B]ased on the
appraisal report presented,” the marital home’s date-of-distribution value was
$1,275,000. The court also found that the townhouse, listed in Schedule D, was a
mixed asset. Of the townhome’s $290,000 value, the marital and/or divisible portion
was $126,693 and Husband’s separate portion was $163,307.
As for the investment accounts listed in Schedule E, the court found: Schwab
#8193’s date-of-separation value was $24,011 and there had been a $17,409 passive
gain during the marriage; Schwab #8773’s date-of-separation value was $121,966 and
there had been a $13,230.42 passive gain during the marriage; and Schwab #0407’s
date-of-separation value was $223,353,00 and there had been a $66,206.00 passive
gain during the marriage. The court made identical findings as to each investment
account: “The [c]ourt fails to find that the simple few trades made on this account by
[Husband] during the marriage amounts to ‘substantial activity’. These gains
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BIDDLE V. BIDDLE
Opinion of the Court
represent passive appreciation and must be declared separate in this order.” As to
the items in Schedule G, the court found that Wells Fargo Checking Account’s
$12,465.00 date-of-separation value was Husband’s separate property. Finally, the
court found that the Rollover Account “contained both separate and marital funds”
and that Husband had “produced sufficient evidence requiring th[e c]ourt to trace out
and classify” the separate contributions.
Wife appeals.
II. Analysis
We begin with some general equitable distribution principles. When a party
applies for an equitable distribution, the North Carolina Equitable Distribution Act
requires the trial court
to determine whether the property is marital or divisible
and provide for an equitable distribution of the marital
property and divisible property between the parties. In
accordance with the Act, the trial court is required to follow
a three-step analysis: (1) identify the property as either
marital, divisible, or separate property after conducting
appropriate findings of fact; (2) determine the net value of
the marital property as of the date of the separation; and
(3) equitably distribute the marital and divisible property.
With regard to the distribution phase, there is generally a
presumption in favor of equal distribution. However, the
trial court may conclude, within its discretion, that
unequal distribution is equitable after considering the
factors listed in [North Carolina General Statute Section]
50-20(c) and making sufficient findings of fact to support
its conclusion.
Mugno v. Mugno, 205 N.C. App. 273, 276-77, 695 S.E.2d 495, 498 (2010). Marital
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Opinion of the Court
property is defined, in part, as “[a]ll real and personal property acquired by either
spouse or both spouses during the course of the marriage and before the date of the
separation of the parties, and presently owned, except property determined to be
separate property or divisible property.” N.C. Gen. Stat. § 50-20(b)(1b) (2025).
Marital property is valued on the parties’ date of separation. N.C. Gen. Stat. § 50-21(b) (2025). Separate property is defined as “[a]ll real and personal property
acquired by a spouse before marriage or acquired by a spouse by devise, descent, or
gift during the course of the marriage.” N.C. Gen. Stat. § 50-20(b)(2) (2025). Separate
property includes “[t]he increase in value of separate property and the income derived
from separate property.” Id.
In this case, Wife argues that the trial court erred in not accepting the parties’
binding stipulations as to the townhouse, Wells Fargo Checking Account, and marital
home. She also contends the court erred in finding and concluding that Husband
successfully traced out his separate contributions to his Rollover Account. Finally,
Wife claims the court erred in finding and concluding that the post-marital
investment gains in Husband’s investment accounts were his separate property. We
address each argument below.
A. Townhome’s Classification
Wife argues that the trial court erred in finding and concluding that the
parties’ townhome was a mixed asset—with a separate component of $163,307.00
awarded to Husband and a $126,693 marital value—because the parties stipulated
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BIDDLE V. BIDDLE
Opinion of the Court
to the townhome’s classification and value. She asserts that the stipulations in the
Pretrial Order were binding upon the parties and the trial court, so the court erred
by considering classifying the townhome as a mixed asset. Husband counters that
the “pre-trial stipulations . . . regarding their townhome were not definite and certain
enough to prohibit the trial court’s ability to trace out” Husband’s “separate
contributions and award those to him.”
We start with our standard of review. Wife acknowledges that “[i]t is not clear
from this Court’s jurisprudence what standard of review applies to the trial court’s
failure to adhere to the binding stipulations of the parties in an equitable distribution
. . . pretrial order.” As noted above, the court considered some amendments to
stipulations in the Pretrial Order at the beginning of the hearing, but the stipulations
about the townhouse were not amended. Wife is correct that no case has explicitly
stated the standard of review for a trial court’s failure to follow “binding stipulations
of the parties.” But as a practical matter, prior cases have applied de novo review, as
explained below. We thus review this issue de novo.
“As a general rule, this Court has noted that any material fact that has been
in controversy between the parties may be established by stipulation.” Plomaritis v.
Plomaritis, 222 N.C. App. 94, 101, 730 S.E.2d 784, 789 (2012) (citations and ellipses
omitted). Where a stipulation is “definite and certain,” and no party has requested
that it be set aside or for permission to present additional evidence contrary to the
stipulated fact, the parties and the trial court are bound by the stipulation. Id. at
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BIDDLE V. BIDDLE
Opinion of the Court
105-06, 730 S.E.2d at 791. But stipulations may be set aside in certain circumstances.
Our Supreme Court recently addressed our case law on setting aside stipulations in
Smith v. Smith:
The Court of Appeals has aptly summarized the procedural
and substantive principles that govern the setting aside of
stipulations:
A party to a stipulation who desires to
have it set aside should seek to do so by some
direct proceeding, and, ordinarily, such relief
may or should be sought by a motion to set
aside the stipulation in the court in which the
action is pending, on notice to the opposite
party. Application to set aside a stipulation
must be seasonably made; delay in asking for
relief may defeat the right thereto. Whether a
motion is seasonably made cannot be
determined with mathematical precision.
It is generally recognized that it is
within the discretion of the court to set aside
a stipulation of the parties relating to the
conduct of a pending cause, where
enforcement would result in injury to one of
the parties and the other party would not be
materially prejudiced by its being set aside. A
stipulation entered into under a mistake as to
a material fact concerning the ascertainment
of which there has been reasonable diligence
exercised is the proper subject for relief. Other
proper justifications for setting aside a
stipulation include: misrepresentations as to
material facts, undue influence, collusion,
duress, fraud, and inadvertence.
387 N.C. 255, 259-60, 912 S.E.2d 762, 765-66 (2025) (citations and brackets omitted).
Here, there was no request to set aside or modify the Pretrial Order’s
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BIDDLE V. BIDDLE
Opinion of the Court
stipulations regarding the townhouse (unlike the marital home, which we address
below). Accordingly, the stipulation remained binding on the parties and the trial
court. See Plomaritis, 222 N.C. App. at 105, 730 S.E.2d at 791. Because the
stipulation’s existence and terms are undisputed, the issue on appeal is not one of
fact-finding or discretionary decision-making, but whether the trial court correctly
applied the law governing the effect of binding stipulations. That determination
involves the legal effect of undisputed facts, which is a question of law and
consequently reviewed de novo. See, e.g., Malinak v. Malinak, 242 N.C. App. 609,
612, 775 S.E.2d 915, 916 (2015). “Under a de novo standard of review, this Court
considers the matter anew and freely substitutes its own judgment for that of the
trial court.” Reese v. Mecklenburg Cnty., 200 N.C. App. 491, 497, 685 S.E.2d 34, 38
(2009) (citation omitted).
In the Pretrial Order, the townhome was included on Schedule D, which
contained “a list of marital property upon which there [wa]s [d]isagreement as to the
[d]istribution and [d]isagreement as to value.” (Emphasis added.) The townhome did
not appear on Schedule G, which listed assets with “[m]ixed, [m]arital and [s]eparate
characteristics.” In other words, the parties’ stipulation to the townhome’s
classification as marital property was clear. The only issues the trial court had to
resolve with respect to items listed on Schedule D were (1) the property’s value and
(2) which party would become the owner.
During the equitable distribution hearing, the parties stipulated to the
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Opinion of the Court
townhome’s value, as the trial court confirmed by stating: “So we’ve got a stipulation
that the value is 290.” Counsel for both parties confirmed that this was correct.
Husband also offered evidence consistent with the Pretrial Order in support of his
contention that an unequal distribution would be equitable because of his separate
contribution to the townhome. In response to his counsel’s question, Husband
testified that he would like the court to consider “giving [him] back [his] initial
investment of $108,000,” noting that he “understand[s] that it’s a marital asset, but
the initial part of it was from a separate account of $108,000.” (Emphasis added.)
In the Order, the trial court found that the townhome’s value was
$290,000.00—per the parties’ stipulation—but also “traced out” Husband’s
contributions by crediting Husband with his initial purchase price ($108,000) and
$55,307 in expenses as his separate property. The court also found that this left a
“marital and/or divisible value of $126,693.00.” Thus, the trial court assigned the
townhome a marital value of $126,693, rather than the stipulated $290,000, and
treated the remainder as Husband’s separate property.
This issue is controlled by our decision in Clemons v. Clemons, 265 N.C. App.
113, 828 S.E.2d 501 (2019). There, the parties stipulated that a townhome was the
wife’s separate property and had a net value of $186,000.00. Id. at 114, 828 S.E.2d
at 503. In the equitable distribution order, however, the trial court found that the
townhome contained a “marital component” and distributed that amount to the wife.
Id. On appeal, we held that “[b]ecause the parties had stipulated that the townhome
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Opinion of the Court
was [the w]ife’s separate property and that its value was $186,000.00, the trial court
erred by classifying a portion of it as marital and attempting to value it.” Id. at 121,
828 S.E.2d at 507.
Here, the trial court erred in classifying the townhome as a mixed marital and
separate asset contrary to the parties’ stipulation. As in Clemons, Husband and Wife
stipulated to their townhome’s value and its classification as marital property. See
id. at 114, 828 S.E.2d at 503. In doing so, the parties “eliminate[d] the necessity of
submitting that issue of fact” to the trial court and were precluded from taking an
“inconsistent position,” such as contending there was a separate component in the
townhome’s classification or value. Smith, 387 N.C. at 259, 912 S.E.2d at 765. The
parties did not, however, stipulate to the townhome’s distribution, and both parties
requested an unequal distribution of the marital estate.
The Pretrial Order’s terms further buttress the conclusion that the existence
of a separate component was a factual issue removed from dispute. Because it was
listed in Schedule D, the trial court had to determine only the item’s value and to
whom it would be distributed. Then, by reaching a stipulation on the townhome’s
value at the hearing, the parties further limited the issues before the trial court. And
because neither party moved to set aside these stipulations, they were binding upon
the parties. See Smith, 387 N.C. at 259-60, 912 S.E.2d at 765-66. And together, these
stipulations supplied the trial court with the facts necessary to support a proper
finding and reach the appropriate conclusion. See Clemons, 265 N.C. App. at 117,
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828 S.E.2d at 505 (“In equitable distribution cases, stipulations in the pretrial order
are intended to limit the evidence needed and to define the issues the trial court must
decide.”). They also narrowed the precise issue the trial court had to rule on: the
townhome’s distribution. Id. Thus, the court erred in finding and concluding that
the townhome had a $163,307 separate component. See id. at 114, 828 S.E.2d at 503.
The trial court tried to reach an equitable result at the wrong stage of the
process. As discussed above, when a party requests an equitable distribution, the
trial court must conduct a three-step analysis. See id. at 115, 828 S.E.2d at 504
(noting that first, “the court must identify and classify all property as marital or
separate”; “[s]econd, the court must determine the net value of the marital property
as of the date of the parties’ separation”; and “[t]hird, the court must distribute the
marital property in an equitable manner”). During the third step—distribution—
“the trial court may conclude, within its discretion, that an unequal distribution is
equitable after considering the factors listed in [North Carolina General Statute
Section] 50-20(c) and making sufficient findings of fact to support its conclusion.”
Mugno, 205 N.C. App. at 277, 695 S.E.2d at 498; see also N.C. Gen. Stat. § 50-20(c)
(2025) (listing the distributional factors a trial court must consider upon determining
“that an equal division is not equitable”).
But here, instead of classifying the townhome as marital property (step one)—
valued at $290,000 (step two)—and then considering Husband’s separate
contribution as a distributional factor supporting an unequal distribution (step
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three), the trial court wrongly attempted to do equity in step two. In the Order, the
court specifically rejected Husband’s contention that he should receive an unequal
distribution in his favor based upon the factor that the townhouse “was purchased
entirely with his separate funds and was originally titled only in his name.” The
court found that Husband’s separate contribution to the townhome’s purchase did
“not justify an unequal distribution in his favor” because the court “followed the
source of funds rule,” determining that Husband’s “separate contributions to th[e]
asset” should “be retained by him.” As support for that finding, the court cited
McLean v McLean, 88 N.C. App. 285, 363 S.E.2d 95 (1987). The trial court erred in
relying on McLean, but that case explains why the court rejected Husband’s
contention for unequal distribution. McLean dealt with the classification of property
as marital or separate, not an unequal distribution:
It is true that there may be both marital and separate
ownership interests in the same property. Our courts have
adopted a source of funds approach to distinguish marital
and separate contributions to a single asset. Under the
source of funds approach, each party retains as separate
property the amount he contributed to purchase the
property plus passive appreciation in value.
88 N.C. App. at 288-89, 363 S.E.2d at 98 (citations omitted).
The parties had stipulated to the townhome’s classification as marital
property, so the trial court could not classify any portion of the townhome as separate
property or assign any portion as having a separate value. See Clemons, 265 N.C.
App. at 114, 828 S.E.2d at 503. Husband properly requested that the trial court
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Opinion of the Court
consider his separate contribution to the townhome’s purchase as a distributional
factor under North Carolina General Statute Section 50-20(c)—but the trial court
rejected Husband’s request based on its erroneous reclassification and valuation of
the townhome. See N.C. Gen. Stat. 50-20(c). Instead, the court should have
considered Husband’s “contribution of his separate property to the marital estate [as]
a distributional factor” under North Carolina General Statute Section 50-20(c).
Collins v. Collins, 125 N.C. App. 113, 116, 479 S.E.2d 240, 242 (1997).
As we explained in Clemons:
[B]y attempting to classify and value a “marital
component” of the townhome contrary to the stipulations
and evidence and then attempting an equitable result by
dividing the net estate equally, the court put the cart before
the horse. The trial court may in its discretion do equity in
the distribution, including an unequal distribution if
supported by the factors under [North Carolina General
Statute Section] 50-20(c), but it may not use equity to
classify or value marital property or debt. Where the trial
court decides that an unequal distribution is equitable, the
court must exercise its discretion to decide how much
weight to give each factor supporting an unequal
distribution. A single distributional factor may support an
unequal division.
265 N.C. App. at 125, 828 S.E.2d at 509 (citations and quotation marks omitted).
We therefore reverse and remand for the trial court to properly classify and
value the townhome in accordance with the parties’ stipulations and to distribute it
as well. See id. On remand, the trial court shall also make new findings as
appropriate regarding the townhome’s distribution, including reconsideration of
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Husband’s contentions related to the townhome as listed on Schedule H of the
Pretrial Order. See id.
B. Checking Account’s Classification
Wife contends the trial court erred in “finding and concluding that Husband’s
[Wells Fargo] [C]hecking [A]ccount contained no marital funds because the parties
stipulated, during trial, that it contained $5,477.001 in marital funds.” As noted
above, we review the trial court’s failure to comply with a fact’s clear and definite
stipulation de novo.
In the Pretrial Order, the Wells Fargo Checking Account was listed on
Schedule G, “items with [m]ixed, [m]arital and [s]eparate [c]haracteristics.” Both
parties agreed the Wells Fargo Checking Account’s date-of-separation value was
$12,465; Husband contended $5,447 was marital and the remainder was separate.
The parties did not agree on the Wells Fargo Checking Account’s value or
classification. During the trial, Husband presented some evidence on the Wells Fargo
Checking Account and during Husband’s testimony, Wife’s counsel agreed that the
account’s marital value was $5,447.00:
[HUSBAND’S COUNSEL]: He’s saying that $5,477 –
[WIFE’S COUNSEL]: 447?
[HUSBAND’S COUNSEL]: Correct, is marital.
1 It appears this number is a typographical error. The number listed in Schedule G and stipulated to at trial was $5,447.
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[WIFE’S COUNSEL]: Okay. We stipulate that that’s the
marital component and the rest of it is separate.
[WIFE’S COUNSEL]: Thank you.
THE COURT: So what’s my stipulated amount on this one
again, please, [Wife’s counsel]?
[WIFE’S COUNSEL]: $5,447 is the number that’s in the
middle of the page.
THE COURT: I see that. Do you accept that stipulation –
[HUSBAND’S COUNSEL]: Yes, Your Honor.
However, in the Order, the court found and concluded that the Wells Fargo
Checking Account’s date-of-separation value—$12,465—was Husband’s separate
property.
Wife is correct that the trial court overlooked the stipulation the parties
reached during the equitable distribution hearing. Husband argues only that he
“introduced an exhibit, without objection, that during the marriage [he had] used that
money and some of his separate funds to pay for marital expenses.” In Husband’s
view, that exhibit supported the court’s finding that the entire account was his
separate property. Husband is correct that he testified about the exhibit, but the
exhibit he references also show he had deposited $5,447 into the Wells Fargo
Checking Account during the marriage. He testified about this exhibit just before the
parties stipulated to the account’s marital value. Husband’s attorney stipulated that
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Opinion of the Court
the marital value was $5,447—the same number he had alleged as the marital value
on Schedule G of the Pretrial Order—and during the trial, Wife’s counsel also
stipulated to the amount.
Therefore, with respect to the Wells Fargo Checking Account, the trial court
erred by finding that the account’s entire value was Husband’s separate property.
Based on the stipulation at trial, the account’s marital value was $5,447 and the
remainder of the account balance should have been classified as Husband’s separate
property.
C. Marital Residence’s Valuation
Next, Wife contends that the trial court “erred in finding and concluding that
the distributable value of the former marital residence was $1,275,000 when the
parties stipulated that its distributable value was $1,100,000.” Wife acknowledges
that Husband filed the Notice and she filed a response and motion in limine before
the trial. She also acknowledges that the trial court considered the arguments from
both her and Husband before beginning to receive evidence. Yet she claims that the
trial court did not set aside the Pretrial Order’s stipulation, but ruled Husband could
“introduce a newer appraisal at a higher value.”
The marital home was listed on Schedule C, meaning the parties agreed that
it (1) was marital property and (2) had a $1,100,000 date-of-separation value. Before
the hearing, Husband filed the Notice, contending the marital residence had a
“current market value” of $1,375,000. Although the trial court denied Husband’s
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Opinion of the Court
request to value the marital home and the lot as two separate parcels, it ruled that
Husband could offer evidence of the marital home’s value at the time of the hearing.
Then, at the hearing, an appraiser testified that the marital home’s fair market value
was $1,275,00. In the Order, the court found that the marital home’s date-ofdistribution value was $1,275,000 and that the “$175,000.00 increase in value from
the date of separation [was] due to passive market factors and that increase
represents, therefore, divisible property.”
Wife argues that this issue is subject to the same standard of review as the
first two issues because the trial court’s findings of fact were “contrary to stipulations
contained in an ED pretrial order” and so they are “reversible error.” However, the
trial court did rule on Husband’s Notice and Wife’s motion in limine regarding
Husband’s request to “amend” his contentions. It allowed Husband’s request as to
the marital home, at least in part. So we review the trial court’s findings on the
marital home’s valuation only to determine if they are supported by the evidence.
Shear v. Stevens Bldg. Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992) (“[T]he
standard of review on appeal is whether there was competent evidence to support the
trial court’s findings of fact and whether its conclusions of law were proper in light of
such facts.” (citation omitted)).
Wife relies on Smith v. Smith to argue that because the trial court did not “set
aside” the Pretrial Order’s stipulation as to the marital home’s date-of-separation
value, it erred by considering Husband’s new-appraisal evidence of the home’s value
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Opinion of the Court
at the date of distribution. In Smith, although the wife had “moved to set aside the
14 January 2019 stipulations, the record nowhere indicate[d] that the trial court ruled
on the motion in any direct proceeding. Nor did the court dispose of the motion either
during or after the equitable distribution hearing.” 387 N.C. at 260, 912 S.E.2d at
766 (emphasis added). But this case is different—for here, unlike in Smith, the trial
court did “rule[ ] on the motion” of both Husband and Wife in a “direct proceeding.”
Id. And this Court has previously held that no particular form is required for a
parties’ request to present evidence different from a stipulation; the important
inquiry is whether the party made the request and the trial court addressed the
request at the hearing. See, e.g., Lowery v. Locklear Const., 132 N.C. App. 510, 514,
512 S.E.2d 477, 479 (1999) (“[The d]efendants moved to submit additional evidence
which sought to relieve them from a previously made stipulation. This motion was
tantamount to a motion to set aside a stipulation and should have been treated as
such by the Commission. The fact that the motion was not delineated as one to ‘set
aside a stipulation’ is not material.” (emphasis added)).
And unlike Smith, the hearing on Husband’s Notice and Wife’s motion in
limine fills the first twenty-six pages of the trial transcript. Husband’s Notice was
“tantamount to a motion to set aside a stipulation,” id., and the trial court correctly
considered it as such. The court considered and ruled on both parties’ requests,
allowing some modifications to the Pretrial Order and denying others. Although Wife
claimed that Husband should have instead filed a motion under Rules 59 or 60 of the
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Opinion of the Court
North Carolina Rules of Civil Procedure instead of the Notice, the court considered
the substance of both parties’ contentions and requests and ruled that the Pretrial
Order would be amended. See id. Wife has neither challenged this ruling on appeal
nor asserted that the trial court made any legal error or abused its discretion by
amending the Pretrial Order. As a result, the facts and ruling in this case are not
controlled by Smith as to the Pretrial Order’s original stipulation on the marital
home’s value.
The evidence Husband presented regarding the marital home’s value at the
date of distribution was within the scope of the trial court’s ruling, which modified
the Pretrial Order’s stipulations on the marital home’s value at both the date of
separation and the date of distribution. The evidence supports the trial court’s
findings as to the value of the marital home. Shear, 107 N.C. App. at 160, 418 S.E.2d
at 845. Therefore, the trial court did not err in the marital home’s classification or
valuation.
D. Rollover Account’s Classification
Wife argues that the “trial court erred in finding and concluding that Husband
met his burden to successfully trace out separate contributions to his” Rollover
Account, and that “Husband failed to trace the separate property remaining in his
[Rollover Account] as of the date of separation.” She further contends the trial court
failed to account for $37,441.86 in withdrawals from the Rollover Account shortly
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Opinion of the Court
before the parties’ separation.2
As noted above, this court reviews the trial court’s findings of fact to determine
if they are supported by competent evidence and whether the findings support the
conclusions of law. See id. We review the trial court’s classification of the Rollover
Account de novo. See Romulus v. Romulus, 215 N.C. App. 495, 500, 715 S.E.2d 308,
312 (2011) (“Because the classification of property in an equitable distribution
proceeding requires the application of legal principles, this determination is most
appropriately considered a conclusion of law.” (citation and quotation marks
omitted)).
Although separate property includes the “increase in value of separate
property and income derived from separate property[,]” an increase in the separate
property’s value can also be marital property in certain circumstances:
If however, the separate property enjoys an increase in
value attributable to the substantial financial, managerial,
and other contributions of the marital estate (an active
increase), any increase in value would be marital property.
If a passive increase in separate property occurs, i.e.
inflation, that increase would remain separate property.
Commingling of separate property with marital property,
occurring during the marriage and before the date of
separation, does not necessarily transmute separate
property into marital property. Transmutation would
occur, however, if the party claiming the property to be his
separate property is unable to trace the initial deposit into
its form at the date of separation.
2 Wife also argues the trial court impermissibly placed the burden on her to prove that the separate
property’s gain was active and thus marital. For ease of reading, this issue is addressed in the following section, as Wife raises the same argument as to three other accounts.
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Opinion of the Court
Fountain v. Fountain, 148 N.C. App. 329, 333, 559 S.E.2d 25, 29 (2002) (citations,
quotation marks, and brackets omitted).
As for Husband’s contributions to the Rollover Account, the trial court’s
Finding No. 15(C) states:
On the date of separation [Husband] owned a
Charles Schwab IRA Rollover Account with account
number ending in 4691. The undisputed evidence of record
establishes that this account contained both separate and
marital funds. [Husband] has produced sufficient evidence
to trace out the separate contributions to this account. This
account originally was managed by OptionsXpress.
OptionsXpress was purchased by Charles Schwab on
October 9, 2017. The original OptionsXpress account was
created by [Husband] on January 5, 2016 to accept rolled
over IRA proceeds from two retirement accounts of
[Husband]. On January 5, 2016[, Husband] rolled into this
account the sum of $239,5I5.97 from his US Airways
Retirement Plan for Pilots, which was established prior to
the marriage of the parties and thereafter received marital
contributions as well. On January 6, 2016 [Husband]
rolled into this account the sum of $315,559.83 from a
Fidelity Retirement Account, which was established prior
to the marriage of the parties and thereafter received
marital contributions as well.
The documentary evidence presented establishes
that on the date of the marriage of these parties the US
Airways Retirement Plan for Pilots contained the sum of
$132,813.62. During the marriage this account received
marital contributions of $101,590.16. The documentary
evidence presented further establishes that the Fidelity
Retirement Account on the date of the marriage of the
parties contained the sum of $182,421.36. During the
marriage this Fidelity account received marital
contributions totaling $115,159.50.
[Husband] also has presented undisputed
documentary evidence that traces further separate
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Opinion of the Court
contributions to the OptionsXpress Account (later
becoming Charles Schwab #4691) from his separate PBGC
premarital retirement monies totaling $41,967.69.
At the date of separation, the Charles Schwab #4691
account contained a total sum of $676,561.95. As
established above, through pre-date of marriage amounts
and separate contributions, a total sum of $357,202.67 of
this account constitutes [Husband]’s separate property.
Additionally, the total sum of the marital contributions
established is $216,749.66. Therefore, the date of
separation amount in this account consisted of nonpassive
combined separate and marital amounts of $573,952.33.
(Emphasis added.) Wife challenges the italicized portion of the above finding—that
the source of the separate contributions was Husband’s separate PBGC3 account—as
unsupported by the evidence. She argues that Husband presented no evidence
tending to show $25,000 in “separate” deposits listed in Exhibit 15 came from his
“separate PBGC premarital retirement” funds.
At the hearing, Husband submitted Exhibit 15, in which he attempted to trace
out the separate assets in the Rollover Account. That exhibit showed that Husband
had deposited five checks—totaling $25,000.00—into an OptionsXpress account
before that account was rolled into the Rollover Account. Exhibit 15 listed the date,
amount, and source of each deposit—funds gifted from Husband’s mother, premarital
CDs, farm income from his separate farm property and separate Schwab account.
During Husband’s testimony about the exhibit, his counsel asked him whether the
checks came from the separate, earlier retirement money from PBGC. Husband
3 PBGC stands for Pension Benefit Guaranty Corporation.
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Opinion of the Court
answered “no.” In Wife’s view, Husband did not provide evidence that the sources of
the funds in the listed checks were separate.
Husband responds that he presented documentary evidence of each deposit
made into the account during the marriage. He also notes that immediately after the
testimony Wife noted, his attorney asked him about why the funds for each deposit
were separate. Husband testified about each check, stating that—as also reflected
on the exhibit—each came from either “farm income, a gift from my mother,” or
another separate Schwab account.
So to the extent the trial court found that these contributions were separate
because they came from “retirement money from PBGC,” Wife is correct that the
evidence does not support this small portion of the finding. However, the trial court’s
finding that these deposits came from separate funds is supported by the evidence,
as all the sources Husband identified were his separate funds. See Shear, 107 N.C.
App. at 160, 418 S.E.2d at 845
Wife also argues that Husband made two withdrawals from the Rollover
Account—totaling $37,441.86—within the weeks leading up to the parties’
separation. She asserts that although Husband testified about the reasons for these
withdrawals, he did not provide evidence to trace the withdrawn funds to either the
separate or marital portions of the Rollover Account. Therefore, according to Wife,
the “trial court did not analyze whether the $37,441.86 withdrawn constituted
separate funds or marital funds.” Wife contends these funds should have been
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Opinion of the Court
considered as Husband’s separate funds, thus reducing the separate portion of the
Rollover Account at the date of separation. But Wife fails to point to any evidence
that would have allowed the trial court to “trace” the source of these withdrawals as
either separate or marital, nor does she cite any legal authority requiring the trial
court to “trace” each withdrawal from an account during the parties’ marriage and
before the date of separation.
The trial court properly found the Rollover Account’s marital and separate
values at the date of separation. See N.C. Gen. Stat. § 50-21(b). Wife did not identify
Husband’s $37,441.86 worth of withdrawals shortly before their separation as one of
the factors favoring an unequal distribution in her favor. Except for the trial court’s
findings on the PBGC account (discussed above) and the Rollover Account’s
appreciation during the marriage (discussed below), we hold that sufficient evidence
supports finding 15(c). This portion of the trial court’s order is affirmed.
E. Investment Accounts’ Classification
Finally, Wife argues that the “trial court erred in finding and concluding that
the post-marital investment gains in Husband’s retirement accounts were his sole
and separate property because he actively managed the accounts.” She contends that
the “appreciation of a spouse’s pre-marital investment account during the marriage
is considered marital unless that spouse establishes it appreciated from passive
market forces.” We review the trial court’s classification of the investment accounts
de novo. Romulus, 215 N.C. App. at 500, 715 S.E.2d at 312.
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Opinion of the Court
In the Order, as to Husband’s three retirement accounts—Schwab #8193,
#8773, and #0407—the trial court made identical findings of fact: “The [c]ourt fails to
find that the simple few trades made on this account by [Husband] during the
marriage amounts ‘substantial activity.’ These gains represent passive appreciation
and must be declared separate property in this order.” And although the trial court
did not include this same language in the paragraph of the Order addressing the
Rollover Account, the trial court implicitly adopted the same analysis for trades
during the marriage in the Rollover Account. The court also found:
[T]he investing activity conducted by [Husband] in each of
these separate accounts did not arise to “substantial
activity” such that appreciation of any of these separate
property accounts was acquired by the marital estate.
[Wife] had the burden to prove that any appreciation in
these separate accounts was due to substantial services
provided by the marital estate. [Wife] failed to provide
evidence of several of the factors required as established in
O’Brien v. O’Brien, 508 S.E.2d 300, 131 N.C. App. 411
(1998).
As to the Rollover Account specifically, the court found that “[d]uring the course of
the marriage the evidence establishes that this account obtained a passive increase
in value . . . of $102,609.62, which sum is a mixed asset of separate and marital
funds.” Because Husband’s separate contributions made up 62.24% of the account’s
“nonpassive combined separate and marital funds,” the court found that 62.24% of
the passive gains—$63,864.23—was his separate property,
Wife claims the trial court’s main error was placing the burden of proof on her
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Opinion of the Court
to prove that the gains during the marriage were marital, when the law requires
Husband prove they were separate. “[U]nder North Carolina law,” Wife says,
Husband had the burden “to establish that any appreciation of separate property is
passive,” and “[i]t is no surprise that the trial court reached the wrong conclusion
when it placed the burden of proof on the wrong party.”
In Ciobanu v. Ciobanu, this Court discussed the burdens of proof as to the
classification of gains on separate property during the marriage:
In this case, the plaintiff, as the party claiming the
increases in value to be marital, had the burden of showing
by the preponderance of the evidence that the increases in
value were marital property. As the findings of fact
indicate, she met her burden by showing that all the
increases in value were “acquired” by either or both spouses,
were “acquired” during the course of the marriage, were
“acquired” before the date of separation, and were presently
owned. Accordingly, the burden shifted to the defendant to
show by the preponderance of the evidence that the
“acquired” increases in value to the properties were his
separate property. On this issue, the defendant introduced
evidence that the increases in value were caused by
inflation and were therefore passive. The plaintiff’s
evidence on this issue, as reflected by the findings of fact,
tends to show that the plaintiff helped manage the
Glenwood property, made significant homemaker
contributions to the Leesville property, and helped improve
both properties. This conflict in the evidence required the
trial court to resolve the issue of whether the increases
were entirely active, entirely passive, or a combination of
both.
104 N.C. App. 461, 466, 409 S.E.2d 749, 752 (1991) (citation omitted) (emphasis
added). Put another way,
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Opinion of the Court
if a spouse proves that separate property has appreciated
after the marriage and before separation, then the law
presumes that the appreciation is active, and therefore
marital property. Therefore, once the presumption
attaches, the spouse who owns the separate property
shoulders the burden of proving that the appreciation was
not active, that is, not the product of “marital labor, talent,
or fund.”
2 Reynolds on North Carolina Family Law § 6.29(c)(1) (6th ed. 2020) (footnotes
omitted).
Thus, both Wife and Husband had burdens of proof as to the gains on
Husband’s separate accounts during the marriage. Ciobanu, 104 N.C. App. at 466,
409 S.E.2d at 752. Wife—as the party claiming that the gains on Husband’s separate
investment accounts were marital—had the burden of proving that classification by
a preponderance of the evidence. See Porter v. Porter, 252 N.C. App. 321, 326-27, 798
S.E.2d 400, 405 (2017) (“[T]his Court has long held that in an equitable distribution
proceeding, the party seeking the specific classification has the burden of proving that
classification by the preponderance of the evidence.”). But as explained in Ciobanu,
Wife’s evidence met her burden of proof by showing that “all the increases in value
were ‘acquired’ by either or both spouses, were ‘acquired’ during the course of the
marriage, were ‘acquired’ before the date of separation, and were presently owned.”
Ciobanu, 104 N.C. App. at 466, 409 S.E.2d at 752.
At trial, Wife countered Husband’s contention that the gains were passive by
arguing the evidence showed that Husband “did not have an investment broker, let
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BIDDLE V. BIDDLE
Opinion of the Court
alone rely on one to make investment decisions; rather, he studied CNBC,
briefing.com, and his Ameritrade platform to make investment decisions completely
on his own.” She presented evidence he has made “trades of his investments 44 times
in Schwab #8193, more than 50 times in Schwab #8773, and 525 times in Schwab
#0407.” The trial court’s findings about the “gains and losses” in the various
investment accounts show that these gains were presumptively marital because “all
the increases in value were ‘acquired’ by either or both spouses, were ‘acquired’
during the course of the marriage, were ‘acquired’ before the date of separation, and
were presently owned.” Id. (citation omitted).
Upon this showing, Wife had met her burden of proof, and the law presumed
the gains during the marriage were active (not passive) and thus marital property.
See 2 Reynolds on North Carolina Family Law § 6.29(c)(1). Then, the burden shifted
to Husband to prove that the gains were passive, not active. See O’Brien v. O’Brien,
131 N.C. App. 411, 420, 508 S.E.2d 300, 306 (1998) (“[T]he party seeking to establish
that any appreciation of separate property is passive bears the burden of proving such
by the preponderance of the evidence.”).
Here, the trial court placed the burden on the wrong party. “When the judge
has expressly placed the burden of proof upon the wrong party, and conflicting
inferences may be drawn from the evidence, it is impossible for an appellate court to
know whether the erroneous allocation of the burden dictated his findings of fact.”
Joyner v. Garrett, 279 N.C. 226, 237, 182 S.E.2d 553, 561 (1971). In such instances,
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BIDDLE V. BIDDLE
Opinion of the Court
remand is appropriate for the trial court to reconsider its findings with the burden on
the correct party. Id.
Despite the trial court’s characterization of Husband’s management of his
accounts as “simple few trades,” we cannot say that the error did not “dictate[ the
trial court’s] findings of fact.” Id. The evidence supports conflicting inferences that
could support the finding of either passive or active gain. For instance, Husband
conducted his own research in making his investments and did not employ a broker.
He made more trades in some accounts than others, so the extent of his activity in a
particular account may be relevant. And over the course of the parties’ eight-and-ahalf-year marriage, Husband made thousands of trades across all his accounts, which
could be viewed as falling short of “substantial activity,” as the trial court found, but
could support the opposite conclusion if the burden were correctly placed on Husband.
The trial court must make this determination, because “[a]lthough we review the trial
court’s conclusions of law de novo, we cannot reweigh the evidence and credibility of
the witnesses.” Romulus, 215 N.C. App. at 502, 715 S.E.2d at 314.
Thus, Wife met her burden of proof, triggering the presumption that the gains
during the marriage were marital. See Ciobanu, 104 N.C. App. at 466, 409 S.E.2d at
752. The burden then shifted to Husband to show the gains were passive. See id.
Because the evidence supports conflicting inferences, we remand for the trial court to
determine whether Husband met his burden of proving that the gains were passive.
Joyner, 279 N.C. at 237, 182 S.E.2d at 561.
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Opinion of the Court
III. Conclusion
For the reasons explained above, we remand for findings of fact on: (1) the
townhome’s classification and valuation; (2) the Wells Fargo Checking Account’s
marital portion; and (3) the classification of gains during the marriage in Husband’s
separate investment accounts ending in #8193, #8773, #0407, and the Rollover
Account and conclusions of law based on those findings. After making such findings
and conclusions on the classification and valuation of these items and the net value
of the entire marital estate, the trial court shall, in its discretion, make additional
findings and conclusions regarding Husband’s contentions for an unequal
distribution based on his separate contributions to the townhome. The court shall
then determine whether the distribution should be equal or unequal and make new
findings regarding the distribution and distributive award based on its new findings
on remand. See Foxx v. Foxx, 282 N.C. App. 721, 724, 872 S.E.2d 369, 372 (2022)
(“When this Court remands an equitable distribution order for more specific findings
of fact, that remand authorizes the trial court to recalculate related portions of the
order that are impacted by the findings made on remand if necessary.”).
If either party requests a hearing on remand to present evidence needed to
comply with this Court’s mandate for the new date of distribution, the trial court shall
hold a hearing limited to that evidence in accord with this opinion. If neither party
requests a hearing, the trial court may in its discretion enter a new order based on
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Opinion of the Court
the existing evidence or hold a hearing. 4
AFFIRMED IN PART; VACATED IN PART; AND REMANDED.
Chief Judge DILLON concurs in part and dissents in part by separate opinion.
Judge TYSON concurs in part and dissents in part by separate opinion.
4 Despite the two concurring in part and dissenting in part opinions, the trial court shall follow the
remand instructions in this majority opinion because at least two judges agree on each part of these instructions.
34
No. COA25-581 – Biddle v. Biddle
DILLON, Chief Judge, concurring in part and dissenting in part.
I concur with the majority opinion except for its treatment of the marital home.
Based on the reasoning below, I conclude the trial court erred by classifying the postseparation increase in value of the home (totaling $175,000.00) as divisible, where
the parties had stipulated the home was entirely marital in nature.
IV. Background
The parties were married in 2011. They purchased their marital home in 2015.
They separated in 2019 and divorced in 2021. Regarding the marital home, when the
parties separated in 2019, Wife remained in the home; Husband moved out.
On 12 September 2023, four years after the parties separated and two years
after they divorced, the parties entered a pre-trial order stipulating the home was
entirely marital with a value of $1,100,000.00 as of the date of separation in 2019. 5
However, in January 2024, just four months after entering the stipulation and a few
weeks prior to the beginning of the parties’ equitable distribution trial, Husband filed
a notice indicating his intention to offer evidence that the home and increased in
value by $175,000.00 since the parties’ 2019 separation. Wife, however, sought to
exclude the evidence based on the parties’ 2023 stipulation.
The trial court, however, allowed Husband’s evidence regarding the home’s
5 The “marital home” as used herein refers to the house located on Lots 246 and 248 the
parties purchased in 2015 and a vacant lot across the street (Lot 244) which they purchased in 2017 to provide a better view from their home. In 2018, the parties recorded a recombination plat, combining the vacant lot with the lots their home was on into a single larger lot (new “Lot 246”). In its equitable distribution order, the trial court found the parties intended their 2023 stipulation regarding the marital home to include the vacant lot.
BIDDLE V. BIDDLE
DILLON, CJ., concurring in part and dissenting in part
post-separation increase in value. And in its equitable distribution order, the trial
court classified this increase as divisible property, valued it at $175,000, and
distributed it (along with the marital portion of the home) to Wife. I conclude,
however, that the record shows that in doing so, the trial court did not set aside the
parties’ 2023 stipulation regarding the home’s classification and value. Rather, the
trial court proceeded in classifying, valuing, and distributing the post-separation
increase, essentially concluding that the parties’ stipulation did not cover the
divisible portion of the home and that, therefore, it did not need to set aside the
stipulation to reach the post-separation increase.
I disagree with the trial court’s interpretation of the parties’ stipulation, as
explained below. Specifically, I conclude that by stipulating the home was entirely
marital, the parties essentially stipulated there was no divisible portion for which
either party would seek equitable distribution.
V. Analysis
There are two rationales by which a trial court may classify, value, and
distribute a certain property in a manner in which the property was not classified,
valued, or distributed as stipulated by the parties in a pretrial order.
First, as our Supreme Court has recognized (as explained in the majority
opinion), a trial court is afforded limited discretion to set aside a pretrial stipulation
regarding a property without the consent of both parties:
A party to a stipulation who desires to have it set aside
-2-BIDDLE V. BIDDLE
DILLON, CJ., concurring in part and dissenting in part
should seek to do so by some direct proceeding, and,
ordinarily, such relief may or should be sought by a motion
to set aside the stipulation in the court in which the action
is pending, on notice to the opposite party. Application to
set aside a stipulation must be seasonably made; delay in
asking for relief may defeat the right thereto. Whether a
motion is seasonably made . . . cannot be determined with
mathematical precision.
It is generally recognized that it is within the discretion of
the court to set aside a stipulation of the parties relating to
the conduct of a pending cause . . . .
Smith v. Smith, 387 N.C. 255, 259–60 (2025) (quoting, with approval, Lowery v.
Locklear, 132 N.C. App. 510, 513–14 (1999)). The Court explained the trial court has
discretion to set aside a stipulation in those situations “where enforcement [of the
stipulation] would result in injury to one of the parties and the other party would not
be materially prejudiced by its being set aside.” Id. at 260. And the Court identified
situations where a trial court could exercise this discretion, as follows:
A stipulation entered into under a mistake as to a material
fact concerning the ascertainment of which there has been
reasonable diligence exercised is the proper subject for
relief. Other proper justifications for setting aside a
stipulation include: misrepresentations as to material
facts, undue influence, collusion, duress, fraud, and
inadvertence.
Id. See also N.C.G.S. § 1A-1, Rule 16(a) (pretrial stipulation order “when entered
controls the subsequent course of action, unless modified at the trial to prevent
manifest injustice”).
Second, our Court has recognized that a trial court may, otherwise, classify,
-3-BIDDLE V. BIDDLE
DILLON, CJ., concurring in part and dissenting in part
value, and distribute any property not mentioned in the stipulation order, as in this
circumstance there is no stipulation which needs to be set aside. Specifically, in
affirming a trial court’s valuing, classifying, and distributing a tax refund not
mentioned in the parties’ pre-trial stipulation order, we stated:
When entered, [the pre-trial] order was binding upon the
parties as to all assets classified as marital property.
However, with respect to any property not listed in the pretrial agreement between the parties, plaintiff has not
waived its inclusion in the equitable distribution. We hold
that the trial judge did not err in considering the tax refund
as marital property.
Allen v. Allen, 168 N.C. App. 368, 373–74 (2005) (emphasis added) (internal citations
omitted). See also Plomaritis v. Plomaritis, 222 N.C. App. 94, 103–04 (2012) (quoting
Allen, 168 N.C. App. at 373–74). That is, there need not be any of the justifications
identified in Smith for a trial court to value, classify, and distribute an asset not
mentioned in the stipulated pretrial order.
Here, I conclude the trial court was not intending to set aside the stipulation
in the pretrial order concerning the marital home, per Smith. Rather the trial court
essentially reasoned it could deal with the post-separation increase in the home’s
value as divisible property because the pretrial order did not mention divisible
property, per Allen.
For instance, prior to the hearing, Husband did not expressly move for the trial
court “to set aside” the pretrial order or any stipulation therein, but rather merely
noticed that he intended to put forth evidence concerning the post-separation increase
-4-BIDDLE V. BIDDLE
DILLON, CJ., concurring in part and dissenting in part
in the home’s value. Of course, as explained by the majority, Husband’s failure to
expressly ask the trial court to “set aside” the parties’ stipulation is not fatal, as long
as it was understood that Husband was seeking relief from his prior stipulation.
However, during the hearing, Husband’s counsel argued that, by entering the
stipulation, his client had not waived the trial court’s consideration of the divisible
increase in the marital home’s value:
[HUSBAND’S COUNSEL]: So we don’t have a sheet to put
in separate and divisible property [within the pretrial
order], so [the divisible portion of the marital home]
constitutes property not listed in the pretrial agreement.
So we have not waived this inclusion in the equitable
distribution.
Clearly, Husband’s counsel was making an argument similar to the one made in Allen
regarding the tax refund. Further, in his appellate brief, Husband concedes the trial
court was merely “interpret[ing] the parties Pre-Trial Order as being silent as to the
issue of any ‘divisible property’ interest to be distributed by the court[,]” and,
therefore, the pretrial order, as written, did not “require the trial court to disregard
properly presented evidence of the divisible interest in [the marital home].”
Also, in allowing Husband to present evidence concerning the post-separation
increase in value of the home, the trial court expressly reasoned that it would follow
the pretrial stipulation but that the pretrial stipulation did not prevent its
consideration of Husband’s evidence:
THE COURT: Just with the time that’s going on in this
case, I’m inclined to operate off the pretrial order. Now, I
-5-BIDDLE V. BIDDLE
DILLON, CJ., concurring in part and dissenting in part
will say, as to -- the Court does have to receive evidence,
[Husband’s counsel] is correct on the [date of] distribution
value, particularly of the home.
Finally, in its equitable distribution order, the trial court acknowledges the parties
entered into the pretrial order but never stated it was setting any portion of that
order aside, much less did the trial court state any justification recognized by our
Supreme Court to set aside the stipulation. See Smith, 387 N.C. at 260. That is, the
trial court did not make any finding that there had been any “misrepresentations as
to material facts, undue influence, collusion, duress, fraud, and inadvertence” to
justify setting aside the parties’ stipulation regarding the marital home. See id.
I conclude the trial court erred by determining Husband had not waived its
consideration of the post-separation increase in the home’s value by entering the
pretrial order. The pretrial order was strict in the issues to be presented and decided
by the trial court:
AND IT APPEARING that by their signatures affixed
hereto, each party stipulates that he or she agree with the
facts [and] issues classified as agreed upon and stipulates
the facts and issues classified as being in dispute are
accurately reflected and that there are no other issues to be
determined by the Court[.]
(Emphasis added). And Exhibit C in the pretrial order expressly references the
marital home and the parties’ agreement that the home be treated entirely as
marital. The pretrial order contains another exhibit listing assets where either
Husband or Wife placed at issue the assets had both marital and separate
-6-BIDDLE V. BIDDLE
DILLON, CJ., concurring in part and dissenting in part
characteristics. Husband could have easily added an exhibit as part of the pretrial
order putting at issue whether the marital home had both marital and divisible
characteristics. But he did not. See Allen, 168 N.C. App. at 373 (pretrial order is not
binding only with respect “to any property not listed” therein). Rather, he stipulated
the home was entirely marital, a stipulation which the trial court did not set aside.
With that said, my vote is to reverse the portion of the order identifying,
valuing, and distributing the post-separation increase of the marital home. I agree
with the majority that on remand the trial court may reconsider whether an equal
division is equitable. And my vote would include that the trial court can include in
its reconsideration its findings that Husband contributed more of his separate
property for the purchase of the marital home.6
6 I do not vote to allow the trial court to reconsider whether to set aside the stipulation in
order to then consider any post-separation increase in value of the marital home. Specifically, there is no evidence in the record to support any of the grounds articulated by our Supreme Court in Smith to justify the trial court to set aside Husband’s stipulation.
For instance, there is no evidence that Husband entered the stipulation based on “a mistake as to a material fact concerning the ascertainment of which there has been reasonable diligence exercised is the proper subject for relief.” Smith, 387 N.C. at 260. Rather, the record shows Husband failed to exercise reasonable diligence prior to entering into the September 2023 stipulation to determine whether there had been any increase in value in the marital home after 2019. (See footnote 1.)
Further, there is no evidence regarding any “misrepresentations as to material facts, undue influence, collusion, duress, fraud, [or] inadvertence.” Id. Husband’s failure to include any divisible portion in the stipulation was due to a mistake of fact which he could have ascertained after reasonable diligence, not due to “inadvertence.” That is, there is no evidence that Husband intended to include the post-separation increase but through oversight failed to include it in the stipulation pre-trial order.
-7-No. COA25-581 – Biddle v. Biddle
TYSON, Judge, concurring in part and dissenting in part.
The majority’s opinion correctly affirms the marital home being valued at an
amount that is contrary to the parties’ pre-trial stipulation of value. I vote to affirm
the trial court’s equitable distribution order on the marital home and to remand for
findings on gains in the investment accounts and the Wells Fargo checking account.
The stipulation found in the pre-trial order afforded a basis for a judicial
decision of the townhome’s classification. Husband’s separate contributions
component of the townhome is properly affirmed. It is unnecessary to remand due to
the appreciation of the value of the asset during the marriage was passive. If there
is an alternative basis to affirm the trial court’s order, it should be affirmed. Payne
v. Buffalo Reinsurance Co., 69 N.C. App. 551, 555, 317 S.E.2d 408, 411 (1984). (“a
judgment that is correct must be upheld even if it was entered for the wrong reason.”)
I respectfully dissent in part.
VI. Townhome
Prior to the hearing, the parties stipulated:
10. Schedule D (attached hereto) is a list of
marital property upon which there is Disagreement as to
Distribution and Disagreement as to Value.
20. The presiding Judge shall rule on the
following:
(c) What is the value of and which party shall be
the owner of the items listed on Schedule D?
BIDDLE V. BIDDLE
TYSON, J., concurring in part and dissenting in part
(bold removed; emphasis supplied)
In the pre-trial order, the townhome was included on the order’s Schedule D,
labeled as “a list of marital property upon which there is Disagreement as to the
Distribution and Disagreement as to Value.” (emphasis supplied). Additionally, the
parties agreed in the pre-trial order the only issues the trial court was to resolve with
respect to items listed on Schedule D were: (1) the value of the property; and, (2)
“which party shall be the owner of the items . . . ”
At the hearing, the parties again stipulated the market value of the townhome
as being $290,000.00. Husband offered evidence tending to show he had invested
$108,000.00 of his separate money prior to the marriage to purchase the townhome
for his daughter and grandchild and it had been titled in his separate name. He
acknowledged during his testimony the townhome was marital property but asserted
and asked for his $108,000.00 separate initial investment to be credited. He also
testified he had independently and separately spent $55,307.00 on expenses related
to the townhome. Husband does not challenge the stipulated value of nor the
classification of the townhome as martial property. These separate property
expenditures by Husband do not appear to be disputed by Wife.
The trial court’s order could have accomplished a similar split in the
$290,000.00 townhome value, while classifying the entire value as marital, as
stipulated, by simply finding an unequal division in the asset in Husband’s favor of
the trial court’s order, instead of purportedly misclassifying a portion of the
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BIDDLE V. BIDDLE
TYSON, J., concurring in part and dissenting in part
townhome’s value as Husband’s separate property.
Husband, as the appellee, is under no obligation to argue an alternate legal
bases to support the presumed to be correct order on appeal. See N.C. R. App. P.,
Rule 28. Wife carries the burden to show error and prejudice.
VII. Conclusion
Our Court has long held: “[A] judgment that is correct must be upheld even if
it was entered for the wrong reason.” Payne, 69 N.C. App. at 555, 317 S.E.2d at 411.
Wife cannot demonstrate any reversible prejudice on the townhome. I concur in part
and respectfully dissent in part.
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