Tag Archive for: Property

by James J. Gross

Ryan Giggs will ask an English divorce court for more than 50% of millions that he has acquired during his marriage due to his special skills in football, or soccer as we call it in America.  The argument failed last week in Randy Work’s “genius” claim.

We have something similar in Maryland which you can argue if you have made special contributions in your marriage.

In Maryland,when distributing marital property: the court must consider, among other factors;

— the contributions, monetary and nonmonetary, of each party to the well-being of the family.  Section 8-205 (b)(1) of the Family Law Article of the Md. Code


— how and when specific marital property or interest in property was acquired, including the effort expended by each party in accumulating the marital property or the interest in property.  Section 8-205 (b)(8) of the Family Law Article of the Md. Code

Some people going through divorce will find anything to argue about.  Stephen Benson, a 64 year old investment banker, settled his divorce with his wife of three years, Kim Charlton, 56, a former model.  He agreed to pay her $365,000.

But when she removed a $150 copper weather vane from the top of their $4 million mansion, he claimed she damaged the house and refused to pay her until she returned it.

Charlton lugged the bulky weather vane to court as Exhibit A.  She pointed out the four screws she hired a worker to detach.

The Judge ordered Benson to pay the $365,000 immediately and let Charlton keep the weather vane.

Guest Post By Brian King, Managing partner at the King Law Offices

[Editor’s Note:  Maryland does not have a Plaintiff’s Inventory Affidavit, but we do have a Financial Statement and a Joint Property Statement.  It is interesting to see what other states do.]

Perhaps the most difficult part of an equitable distribution case is the discovery phase. This begins with the difficult task of putting together an inventory affidavit.

The Plaintiff’s Inventory Affidavit begins the process. This must be completed within 90 days after service of a claim for equitable distribution, the party who first asserts the claim shall prepare and serve upon the opposing party an equitable distribution inventory affidavit listing all property claimed by the party to be marital property and all property claimed by the party to be separate property, and the estimated date-of-separation fair market value of each item of marital and separate property.[1] The Defendant’s Inventory Affidavit is then due within 30 days after service of the inventory affidavit, the party upon whom service is made shall prepare and serve an inventory affidavit upon the other party.[2]

The inventory affidavits prepared and served pursuant to this subsection shall be subject to amendment and shall not be binding at trial as to completeness or value. Because the initial inventory affidavits are subject to later amendment, it is unwise to place too much reliance upon them. By the time the case is tried, the facts may be materially different from what was stated in the initial inventory affidavit.

In particular, note that the opposing party’s financial affidavit does not constitute a binding admission as to the classification or value of any property owned by the parties. A party’s own financial affidavit is likewise not binding, especially where relevant information is withheld by the other side.[3] The court may extend the time limits in this subsection for good cause shown[4].

The affidavits are subject to the requirements of General Statutes section 1A-1, Rule 11, and are deemed to be in the nature of answers to interrogatories propounded to the parties. Any party failing to supply the information required by this subsection in the affidavit is subject to N.C.G.S. § 1A-1, Rules 26, 33, and 37. During the pendency of the action for equitable distribution, discovery may proceed.[5]

The inventory affidavits are therefore intended to supplement traditional discovery, not to replace it. Discovery begins with the inventory affidavits, but it does not end there. “[F]ormal discovery procedures as provided by the North Carolina Rules of Civil Procedure are available to the parties in an equitable distribution action to gather the information needed for the parties to prepare and for the trial court to make its determination.”[6]

Note in particular that the opposing party’s inventory affidavit may well contain good-faith misstatements, inadvertent errors, or even outright lies. The inventory affidavit is no more likely to be correct than a response to an interrogatory or a statement made in a deposition. It is therefore essential to use the traditional discovery process, to the maximum extent possible, to double-check all statements made on the opposing party’s inventory affidavit. To take a very simple answer, if the other party owns a business, do not rely on the value stated on the inventory affidavit. Use the normal discovery process to obtain financial information about the business, and retain an expert to evaluate that information and determine whether the value stated on the affidavit is correct.

As a general rule, the inventory affidavits are more useful for identifying marital property than for classifying or valuing it. Perhaps the most clear issue surrounding the equitable distribution affidavit was in the recent Ross v. Ross[7] case from 2011. In that case, a request for protection asked the husband to produce any and all documents upon which you have relied, or intend to rely, to support your contention that the land and/or the residential building at 7018 Ocean Drive, Emerald Isle, North Carolina is your separate property, including but not limited to any evidence of source of funds used in acquiring said alleged marital property.

The husband ignored the request for a considerable period of time, and then responded: Any and all documents that I have to support my contention that the land and/or residential building at 7018 Ocean Drive, Emerald Isle, North Carolina is my separate property, is [sic] proprietary at this time. This evidence will be presented and reveled [sic] in court at the ED hearing(s) when necessary. I have always contended the Emerald Isle property is my separate property from the beginning. (Refer to Plaintiff’s Interrogatories, June 14, 2002, items 5 and 6.)

The broad claim that the requested information was “proprietary” was essentially a complete failure to respond to discovery. The husband “was claiming that he is the owner of his documents and he will not reveal them to anyone unless and until he wants to; this is not a valid or reasonable response to a discovery request.” Id.

The trial court imposed a very harsh sanction—it struck the husband’s equitable distribution claim, and barred him from testifying at trial. But the Court of Appeals held the sanction justified by the husband’s complete and long-standing failure to comply with discovery.

The Court of Appeals then held that the: “Plaintiff has no right to keep his “proprietary” information which he has been required by court order to produce in discovery a secret until he deems it necessary to reveal it at the equitable distribution hearing. Plaintiff does not have the prerogative to decide what information he will produce in discovery after the trial court has ordered this production. Thanks to plaintiff’s intransigence, the trial court has not yet had the opportunity to reconsider the classification and valuation of the marital and separate interests in the Emerald Isle property and to enter an order as directed by our prior opinion. The trial court’s sanctions order barring plaintiff’s equitable distribution claim and presentation of evidence does not prevent the trial court from entering an order as to classification and valuation of the separate and marital property but affects only the evidence which will be available at the hearing which will someday, we trust, be held on this issue.[8]

Striking of claims as a discovery sanction is rare, but it is justified when there has been a complete and long-standing failure to comply with discovery.

  • [1] N.C.G.S. § 50-21(a)
  • [2] Id.
  • [3] See Franks v. Franks, 153 N.C. App. 793, 571 S.E.2d 276 (2002) (profit-sharing plan was marital property even though not listed in pretrial order, where husband did not disclose the plan until the actual hearing).
  • [4] N.C.G.S. § 50-21(a).
  • [5] Id. § 50-21(a).
  • [6] Coleman v. Coleman, 182 N.C. App. 25, 29, 641 S.E.2d 332, 336 (2007).
  • [7] Ross v. Ross, ___ N.C. App. ___, ___, 715 S.E.2d 859, 863 (2011)
  • [8] Id. at ___, 715 S.E.2d at 865-66

About The Author: Brian King is the managing partner at the King Law Offices, and is a member of the North and South Carolina bars. Brian King is a graduate of Campbell Law School and completed his undergraduate degree at University of North Carolina at Charlotte.

In Maryland divorces, the court is required to determine the value of marital assets including the marital residence.  Enter the real estate appraiser.  Appraisers say about a third of their business comes from divorce cases.  And they are noticing an increase in business.

One approach in divorce is for both parties to hire one neutral appraiser to give an opinion of value.  But in highly contested cases, where there are a lot of assets at stake, it is not uncommon for each party to hire their own appraiser.   Appraisers say that two professional appraisals should come in within 10% of each other but that doesn’t always happen.  In cases where the appraisals vary widely, sometimes a third appraiser is called in to reconcile the difference.

With property values rising and falling rapidly in the past few years, the date of the appraised value can make a difference too.  And a real estate appraiser doesn’t value the contents of the house.  That requires a personal property appraiser.

Evangeline bought a house on Brandywine Street in D.C. in 1967 for $26,950.  In 1974 she married David and he moved into her house.  David paid the mortgage during the marriage until 1986.

At their divorce Evangline claimed the property was all hers under D.C. Code § 16-910(a) (1981), which provides that property acquired prior to the marriage is the sole and separate property of the spouse who originally owned it and must be assigned to that spouse upon divorce.

The trial court awarded David a 50% interest in the house.  Evangeline appealed and the DC Court of appeals reversed in part.  The statute it said prohibits the divorce judge from giving David a legal interest in the house.  The court could not transfer title to premarital property and therefore, it must remain in Evangeline’s name.  However, the judge could give David an equitable interest in the house.

The court then instructed the trial judge to determine a dollar amount of that interest, not a percentage, based on David’s contributions and appreciation during the marriage.   Yeldell v. Yeldell, 551 A.2d 832 (1988)