The North Carolina Court of Appeals has instructed a trial court to reconsider its rulings about the value of a clutch of real estate holdings, saying in a Jan. 16 unpublished opinion that the court had incorrectly concluded it could only value the properties based on appraisals. The appeals court said that judges could consider an owner’s opinion as to the value of his properties, so long as that opinion was properly substantiated.
Joseph Dalton appealed an equitable distribution order, arguing that an Onslow County District Court judge had erred in valuing three pieces of real property. At a hearing, Dalton had testified to the value of the properties, basing his opinion on sales of similar homes nearby, or tax values. Judge Sarah Seaton declined to consider the testimony, finding that she could only value the properties based on recent appraisals, which neither party had provided.
In May of 2017, the state’s Supreme Court ruled in a foreclosure case that courts could not consider an owner’s unsubstantiated opinion about the value of his property, altering what had been the general rule that an owner is entitled to testify to the value of his own property unless it affirmatively appears that the owner does not know the value. The appeals court said the same principle is true concerning property values in the context of equitable distribution―an unsubstantiated opinion is insufficient.
But the court said that judges can value properties based on any competent evidence in the record, and are not required to rely on appraisals. In this case, the court held, Dalton’s testimony was substantiated by external evidence. The appeals court instructed the trial judge to consider the testimony in order to gauge its credibility and reconsider the valuation accordingly. It also found that the trial judge had made mathematical errors in the valuations of some of the properties.
“When an equitable distribution order contains mathematical errors, this Court lacks confidence in the correctness of the entire order,” Judge Robert Hunter noted.
An unpublished Court of Appeals opinion does not constitute controlling legal authority, and citation is disfavored, but it may be permitted in accordance with the state’s Rules of Appellate Procedure.
Mark L. Hayes of Durham represented Dalton, the plaintiff in the case, on appeal. Hayes noted that his client’s opinion about the value of his properties was particularly well grounded.
“In our case, my client is a real estate agent, and so he wasn’t just an owner offering his personal opinion without any data to back it up. He had a pretty good idea based on [comparable sales],” Hayes said. “Ultimately my client had more than enough information that his opinion shouldn’t just be thrown out as a bald-faced assertion.”
James Lea of Wilmington represented the defendant, who had conceded that that portion of the equitable distribution order should be remanded for further findings.
The-14 page decision is Dalton v. Dalton (Lawyers Weekly No. 012-007-18). The full text of the opinion is available online at nclawyersweekly.com.
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