Opinion
Record No. 0943-94-4 Record No. 0951-94-4
Decided: April 4, 1995
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Kathleen O'Brien (Kristin D. Alden; Fite, O'Brien Byrum, Ltd., on briefs), for Winifred K. Barnes.
Donald Barnes, pro se.
Present: Judges Barrow, Koontz and Senior Judge Duff
Pursuant to Code Sec. 17-116.010 this opinion is not designated for publication.
Winifred K. Barnes, wife, appeals the decision by the trial court to value her fifty percent share of husband's pension at $70,566.53. For purposes of oral argument, we consolidated the cross-appeal of husband, Donald A. Barnes. In his cross-appeal, husband alleges the trial court erred in (1) refusing to give him credit for money allegedly saved because of a favorable mortgage rate on the Colorado home procured before the marriage; (2) refusing to offset the equitable distribution award based on payments made from his separate property to maintain the Fairfax County marital home; and (3) refusing to assume jurisdiction over the custody of the parties' minor children while the issue is pending in the Colorado appellate court. For the reasons that follow, we affirm in part and reverse in part. We reverse the trial court's valuation of the pension. We affirm the trial court's judgment regarding payments made by husband to maintain the Fairfax home, and we affirm the trial court's refusal to credit husband for the favorable mortgage brought into the marriage. As to assuming jurisdiction over custody, we affirm the existing stay of any action on that issue until a decision is rendered by the Colorado appellate courts.
As a preliminary matter, we address husband's motion regarding alleged defects in wife's filing her notice of appeal. Finding no merit to husband's argument, we dismiss that motion.
Husband and wife were married in Colorado in 1983. The parties have three minor children. At the time of the marriage, husband already owned a home in Colorado which he purchased in 1977.
Husband is an attorney who practiced law in Colorado until 1991, when he was offered a job with the Internal Revenue Service in Washington, D.C. While a member of a Colorado law firm (Baker Hostetler), husband acquired a pension which became fully vested and funded by the time he left the law firm. In April 1991, husband moved to Washington, D.C. and began working with the IRS, while wife and the children remained in Colorado. The parties bought a house in Fairfax County and sold their Colorado home. On August 29, 1991, wife brought the three children to Fairfax to live and enrolled them in school.
Five weeks later, on October 8, 1991, wife returned to Colorado with the children. She filed a petition for divorce and child custody in the Colorado District Court on October 8, 1991. On October 11, 1991, husband filed a petition for custody of the children pursuant to the Uniform Child Custody Jurisdiction Act (UCCJA) in the Family Court of Fairfax County. On October 15, 1991, wife filed a petition for custody under the UCCJA in the Colorado court. On October 25, 1991, husband filed a Bill of Complaint in Fairfax Circuit Court petitioning for a divorce and a division of property.
On December 2, 1991, the Fairfax County Family Court found that the home state of the three children "was, and still is" Colorado, and, at the time husband filed his custody petition, "a proceeding involving custody of the minor children was then pending in the State of Colorado." Pursuant to Code Sec. 20-129, the court stayed all action on the father's custody petition pending a decision by the Colorado court regarding custody jurisdiction.
On April 7, 1992, the Colorado court ruled that it had immediate temporary jurisdiction to enter temporary orders, and it ordered that the children not be removed from Colorado. On May 20-21, 1992, the Colorado court conducted a hearing to determine which state had jurisdiction regarding (1) the dissolution of the marriage, and (2) child custody under the UCCJA. On January 8, 1993, the Colorado court decided that Virginia has jurisdiction over the dissolution of marriage because neither party was domiciled in Colorado for at least ninety days prior to the filing of the petition. The court held that Colorado has jurisdiction under the UCCJA to determine custody and visitation because wife's October 8, 1992 Petition for Dissolution of Marriage "request[ed] that custody of the children be granted to [her]," thus putting "in issue the custody of the minor children." The court also found that Colorado was the children's home state. Applying Colorado statutes, the court found that Colorado courts do not lose jurisdiction over children until they have resided outside the state for more than six months.
On June 30, 1993, the Circuit Court of Fairfax County affirmed the stay issued by the Fairfax County Family Court and held that Colorado properly assumed jurisdiction and that Virginia did not and/or should not assume jurisdiction under Code Sections 20-126 (the UCCJA) and 20-130 (inconvenient forum).
On March 15-16, 1994, an equitable distribution hearing was held in the Circuit Court of Fairfax County. The parties presented evidence regarding the pension, the favorable mortgage, and costs for maintaining the Fairfax home. A final decree of divorce as to property was entered on April 22, 1994.
THE PENSION
In addition to a monetary award made pursuant to Code Sec. 20-107.3(D),
and upon consideration of the factors set forth in subsection E, the court may direct payment of a percentage of the marital share of any pension, profit-sharing or deferred compensation plan or retirement benefits, whether vested or nonvested, which constitutes marital property and whether payable in a lump sum or over a period of time. The court may order direct payment of such a percentage of the marital share by direct assignment to a party from the employer trustee, plan administrator or other holder of the benefits. However, the court shall only direct that payment be made as such benefits are payable. No such payment shall exceed fifty percent of the marital share of the cash benefits actually received by the party against whom such award is made. "Marital share" means that portion of the total interest, the right to which was earned during the marriage and before the last separation of the parties, if at such time or thereafter at least one of the parties intended that the separation be permanent.
Code Sec. 20-107.3(G).
In 1988, the legislature repealed Code Sec. 20-107.3(E) (8) which required the trial court to determine the present value of a pension in determining the amount of the monetary award.
A pension, by definition, is "a retirement benefit paid regularly, with the amount of such based generally on length of employment and amount of wages or salary of pensioner. It is deferred compensation for services rendered." Robinette v. Robinette, 10 Va. App. 480, 485, 393 S.E.2d 629, 632 (1990). Pensions constitute an "unusual type of property in that, in most cases, the pension benefits are 'future oriented' " and not "readily susceptible to valuation or distribution at the time of an evidentiary hearing." Gamble v. Gamble, 14 Va. App. 558, 565-66, 421 S.E.2d 635, 640 (1992). Thus, "retirement and pension plans, by their nature and diversity, present unique problems" in a "division of marital wealth," Keyser v. Keyser, 7 Va. App. 405, 412, 374 S.E.2d 698, 702 (1988), and the "task of the trial court in making an equitable distribution" of such benefits is "not an easy one." Steinberg v. Steinberg, 11 Va. App. 323, 326, 398 S.E.2d 507, 509 (1990).
Banagan v. Banagan, 17 Va. App. 321, 324-25, 437 S.E.2d 229, 230-31 (1993).
"A present value calculation is of direct use only where payment of the portion of the monetary award attributable to the pension is to occur immediately rather than over a period of time." Zipf v. Zipf, 8 Va. App. 387, 397, 382 S.E.2d 263, 268 (1989). "Because use of the present value to fix a sum certain monetary award derived from a pension is not only unnecessary, but inappropriate where distribution is deferred, we conclude that in this instance the legislature did not intend the present value to serve as a means of diminishing the true value of the monetary award." Id. at 397, 382 S.E.2d at 269.
Although husband's pension was fully funded and vested before the parties separated in 1991, payments are deferred until a future time. Therefore, once the trial court determined that wife was entitled to a fifty percent marital share of the pension, the pension's current value became irrelevant. What is relevant is the value of the pension when it is due and owing so that the parties share equally in any increases or decreases in the pension. Cf. Wagner v. Wagner, 15 Va. App. 120, 421 S.E.2d 218 (1992) (affirming award to husband of one-half of wife's worthless asset, indicating that, should it become valuable, husband would share in its gain), aff'd on reh'g en banc, 16 Va. App. 529, 431 S.E.2d 77 (1993).
Based on the legislative changes to Code Sec. 20-107.3, the trial court was not required to establish a present value for the pension. All that the trial court needed to do was to have the husband notify the administrator for the pension plan that wife was to receive fifty percent of the pension if, when, and how it is disbursed. Therefore, we reverse and remand for the trial court to enter an order directing the husband to execute documents enabling the plan administrator to separate and supervise wife's fifty percent share of the pension.
THE FAVORABLE MORTGAGE RATE
"Code Sec. 20-107.3 requires the court to determine the ownership and value of all real and personal property of the parties. Given the complexity inherent in rendering these determinations, we rely heavily on the trial court's discretion." Aster v. Gross, 7 Va. App. 1, 9, 371 S.E.2d 833, 838 (1988).
Prior to the parties' marriage, husband owned a home in Colorado. The mortgage rate on that home was lower than the rates available at the time of marriage. Husband contended that the favorable mortgage rate was his separate property brought into the marriage and that this favorable rate allowed the parties to save a considerable amount of money.
After carefully reviewing the record, we cannot say that the trial court abused its discretion in finding husband's argument speculative and conjectural. Moreover, husband failed to prove that the savings from the favorable mortgage were separately maintained and were not transmuted into marital property through commingling. See Code Sec. 20-107.3(A) (3) (d); see also Smoot v. Smoot, 233 Va. 435, 441, 357 S.E.2d 728, 731 (1987); Decker v. Decker, 17 Va. App. 12, 15, 435 S.E.2d 407, 410 (1993).
PAYMENTS TO MAINTAIN FAIRFAX MARITAL HOME
The husband contends that the trial court erred in failing to credit him with money he paid to maintain the Fairfax County marital house purchased in July 1991. The trial court has discretion to effect an equitable distribution of property. The record reflects evidence from which the trial court could have concluded that the husband had not contributed adequately to the children's support after the separation, thus offsetting the expenditures claimed by the husband. We find no abuse of discretion and affirm the trial court on this issue.
CUSTODY JURISDICTION
We decline to address this issue while it is before the Colorado appellate courts. See Code Sec. 20-129 (pertaining to simultaneous proceedings in other states). We also agree with the findings from the Circuit Court of Fairfax County determining that Virginia should decline jurisdiction based on the factors listed in Code Sec. 20-126 (Virginia adoption of the UCCJA) and Code Sec. 20-130 (inconvenient forum).
Therefore, pending resolution by the Colorado courts, we affirm the stay of further litigation in Virginia regarding child custody.
For the foregoing reasons, the final decree entered by the trial court is affirmed in part and reversed in part.
Affirmed in part, reversed and remanded in part.