A family court judge could not require a wife to liquidate her own separate property in order to pay a large distributive award to her husband, the North Carolina Supreme Court recently decided.
The couple, Andrea and William Crowell, married in 1998 and divorced in 2015. Before they married, William started several small businesses that he claimed as his own separate property. Andrea claimed she had in interest in them as marital property. The court found that they lived well beyond their means, and that to fund the lifestyle William sold his separate property and borrowed from his businesses, putting the couple in debt.
Andrea, on filing for divorce, sought equitable distribution of their marital property (in other words, fair division of their assets and debts) and alimony. The judge denied alimony and determined that the marital property had to be split equally, requiring that Andrea pay William an $800,000 “distributive” award. Since Andrea didn’t have the means to pay the award in full, the court ordered that she sell some of her own real estate to cover it.
But the supreme court reversed on appeal.
The court found that while the state law provision on distributive awards didn’t specifically say a spouse couldn’t be forced to sell his or her own separate property to pay such an award, it didn’t specifically say he or she could. The court said the rest of the state’s equitable distribution law allowed for the distribution of marital property only, so the lower court’s order didn’t follow the law.
Divorce and property division law is different in every state.