In the recent case of Green v. Green, (N.C. App., Oct. 3, 2017), the court of appeals held that a fee received by a lawyer as the result of the resolution of a case his firm took on a contingency basis before the lawyer separated from his wife was not marital or divisible property. The court based this decision on the fact that the lawyer did not receive the fee until after the date of separation and did not have a right to receive the fee on the date of separation because the agreement provided that no fee would be received if there was no recovery in the case. The appellate court reversed the trial court decision that a portion of the fee was ‘deferred compensation’ for work the husband performed before the date of separation. The trial court had classified this portion of the fee as divisible property pursuant to GS 50-20(b)(4)(b) which provides that divisible property includes property received “as the result of the efforts of either spouse during the marriage and before the date of separation.”
This decision by the court of appeals is significant because it is the first time the court of appeals actually reviewed a decision by a trial court interpreting this particular category of divisible property and because the holding of the appellate court seems to say this category is much more limited than the language of the statute indicates. Continue Reading