Opinion
Record No. 1173-91-4
November 3, 1992
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY J. HOWE BROWN, JUDGE.
Robert R. Sparks, Jr. (Herge, Sparks, Christopher Biondi, on brief), for appellant.
John P. Snider (Donna M. Matthews; Matthews, Snider Williams, on brief), for appellee.
Present: Judges Baker, Benton, and Moon.
Argued at Alexandria, Virginia.
Pursuant to Code § 17-116.010 this opinion is not designated publication.
James Richard Bergdahl appeals the trial judge's decision awarding Carol Larson Bergdahl a certain portion of his pension and other marital assets. He contends the trial judge erred: (1) in awarding the wife a portion of his pension earned after the parties separated; (2) in requiring him to pay the mortgage on the marital residence until its sale without credit for reduction of principal from the date of the order to the date of sale; (3) in awarding the wife an amount intended to cover her federal income taxes upon the sale of the marital residence; (4) in ruling that he could receive no cash awarded him until the sale of the marital residence; (5) in failing to give him credit for his debts or attorneys' fees; (6) in not finding that the wife's commingling of separate property with marital property transmuted the commingled property to marital property; and (7) in determining the division of the marital property. We affirm in part, reverse in part, and remand this case for proceedings consistent with this decision.
I.
The parties were married in 1960. The wife moved out of the marital home in March, 1989, taking most of the marital liquid property. The husband continued to live in the marital residence, making the monthly mortgage payments. At the time the divorce suit was commenced, their two children were both over eighteen years of age.
II.
When the bill of complaint was filed, the statute relating to pensions stated:
[T]he 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. However, the court shall only direct that payment be made as such benefits are payable.
Code § 20-107.3(G). The trial judge ordered that the wife receive one-half the marital share of the husband's pension to be paid as such benefits are received monthly, using the following formula:
[N]umber of years and months in which the parties were married and living together during the husband's period of service qualifying him for civil service retirement (28.5 years) divided by the total number of years and months of United States employment creditable for United States Civil Service retirement at the time of his retirement, multiplied by one half (1/2) of the husband's monthly gross retirement pay.
The trial judge's formula, which limited the wife's entitlement to a percentage based on the parties' 28.5 year marriage, properly permitted the wife to benefit from any future earnings and adjustments attributable to her deferred share of the pension and ensured that the wife would not be subjected to the additional discounting that would occur if her award was set at a fixed sum certain at the time of equitable distribution. See Zipf v. Zipf, 8 Va. App. 387, 397-98, 382 S.E.2d 263, 268-69 (1989). "[U]se 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." Id. at 397, 382 S.E.2d at 269.
We find the husband's reliance on Steinberg v. Steinberg, 11 Va. App. 323, 398 S.E.2d 507 (1990), unpersuasive in resolving this issue. The dispute in Steinberg arose after the parties stipulated to the present value of the pension. InSteinberg, the parties failed to indicate whether that sum had been discounted before or after the computation, when the husband would be eligible to collect payments, and whether the pension would be distributed in a lump sum or periodically.Id. at 328, 398 S.E.2d at 510. This Court determined that awarding the non-employee spouse a percentage of an unknown benefit would impermissibly delay the equitable distribution award until pension payments began.
In the present case, the trial judge had sufficient information concerning the terms of the pension to determine the portion of the pension that should be awarded to the wife. The formula was designed to achieve an equitable distribution of the pension benefits. See Primm v. Primm, 12 Va. App. 1036, 1037, 407 S.E.2d 45, 46 (1991). We find no error in the trial judge's calculation of the wife's monetary share of the pension.
III.
The husband contends that the trial judge abused his discretion in requiring the husband to continue making mortgage payments on the marital home until its sale without giving the husband credit for reducing the principal. Though we find no indication that the husband was expressly required to continue making these mortgage payments, we conclude that the trial judge abused his discretion in failing to give the husband credit for those payments in the final decree.
We will not disturb a trial judge's findings unless they are plainly wrong or not supported by the evidence. Keyser v. Keyser, 7 Va. App. 405, 409, 374 S.E.2d 698, 701 (1988). In order to "give to husband recognition of the amount of mortgage he had paid since separation," the trial judge directed that the wife pay him $18,810 upon the sale of the marital home. However, this adjustment only gives the husband credit for the period he made these payments between the parties' separation through the final order of divorce.
The husband has continued to make mortgage payments since the trial judge calculated the equitable distribution award. Thus, the husband is adding to the value of the equity in the marital residence from his post-divorce separate funds as the parties await its sale. Upon the house's sale, the husband will be forced to split with the wife the increase in equity due to his post-divorce efforts.
The trial judge must make "an equitable distribution of all property classified as marital property." Smoot v. Smoot, 233 Va. 435, 441, 357 S.E.2d 728, 731 (1987). In this instance, the trial judge's award is not equitable. The trial judge has abused his discretion and we remand this issue to the trial judge with instructions to modify the terms of the divorce decree and to appropriately credit the husband for payments made by him from his separate funds upon the sale of the marital residence and to give due consideration to an adjustment for rental value.
IV.
Code § 20-107.3(E)(10) specifically permits the trial judge to consider "the tax consequences to each party" when determining the amount of the division or transfer of jointly owned property. We will not disturb the trial judge's findings unless it appears from the record that the trial judge abused his discretion, misapplied one of the statutory factors, or made findings of fact not supported by the record. Brown v. Brown, 5 Va. App. 238, 244-45, 361 S.E.2d 364, 368 (1987). The trial judge's decision properly addressed the tax consequences. We concluded that no error has been proved.
V.
The trial judge has the power to grant a monetary award based on the equities, the rights and interests of each party in the marital property, and the factors listed in Code § 20-107.3(E). Code § 20-107.3(D). "[T]he trial court may exercise its discretion in determining when the lump sum award or the periodic fixed amounts are due and payable." Brown, 5 Va. App. at 246, 361 S.E.2d at 369 (emphasis added). The husband claims the trial judge erred in refusing to allow the husband to collect the cash awarded him by the court until the marital home sold. He cites general and unsubstantiated financial difficulties as well as the trial judge's failure to consider the wife's willful desertion of the marriage as the basis warranting a remand on this issue to the trial court.
The opinion letter, dated May 7, 1990, clearly indicates that the trial judge complied with Code § 20-107.3(D) in determining what portion of the marital property should be distributed to the wife. The trial judge's determination that the husband would receive his portion of the equitable distribution award upon the sale of the marital home is within the discretion given by statute. The evidence proves no abuse of that discretion.
VI.
The husband claims the trial judge erred in failing to give the husband credit for his debts or to recognize the attorney's fees he had incurred. While it is true that the trial judge must consider the debts of the parties when determining equitable distribution awards, see Code § 20-107.3(D)(7), the trial judge did not err in failing to give the husband credit for debts he claimed to owe. The record contains no supporting proof of his alleged indebtedness to his mother. It is not an abuse of discretion for the trial judge to reject a claim of debt that is not accompanied by any evidence of that debt. Trivett v. Trivett, 7 Va. App. 148, 154, 371 S.E.2d 560, 563 (1988). As for the $1500 the husband claims is owed the daughter, there is no supporting proof of that alleged debt. Upon the record before us, we cannot conclude that the trial judge erred.
The trial judge did not award either party attorney's fees. "An award of attorney's fees to a party in a divorce suit is a matter for the exercise of the trial court's sound discretion after consideration of the circumstances and equities of the entire case." Davis v. Davis, 8 Va. App. 12, 17, 377 S.E.2d 640, 643 (1989). Based on the trial judge's careful examination of the facts of this case and his determination that even though the husband was granted a divorce based on his wife's desertion of the marriage, he bears equal responsibility for the break up of the marriage, we find no abuse of discretion in the trial judge's decision not to award the husband attorney's fees.
VII.
When a party commingles separate property with marital funds, the trial judge must classify this commingled property as marital. Smoot, 233 Va. at 441, 357 S.E.2d at 731. The husband claims the trial judge erred in ruling that even though the wife commingled $5000 in separate assets with the parties' marital assets, such commingling did not transmute the commingled assets into marital property. However, the evidence must prove that the commingling of the funds was significant enough to the marital relationship to "trigger the presumption that the separate property has been transmuted to marital property." Lambert v. Lambert, 6 Va. App. 94, 103, 367 S.E.2d 184, 190 (1988).
In this case, the evidence of the brief commingling of funds did not prove a transmutation. Moreover, the trial judge found that even if the brief period during which the wife maintained the $5000 in a joint account transmuted the money, "wife should be allowed to keep it and not share it because it was discretely kept as part of her inheritance." It is clear from the record that, except for a brief period when two funds were commingled, the wife acquired, preserved and maintained the money she received through inheritance separate and discrete from marital property.
Finding that separate property has been transmuted into marital property by commingling need not work an inequity to the party who brought the separate property to the marriage because, when making a monetary award under our statute, the trial judge must consider among other factors, the contribution of each party in acquiring, preserving, and maintaining the property.
Lambert, 6 Va. App. at 103-104, 367 S.E.2d at 190. Any error that resulted from the trial judge's initial assessment that the money was not transmuted is harmless in light of the trial judge's finding that even if it was marital property she would be entitled to keep it free from claim of her husband.
Although Code § 20-107.3(E)(5) requires the trial judge to consider the circumstances leading to the dissolution of the marriage, the trial judge need only "consider those circumstances leading to the dissolution of the marriage, that are relevant to determining a monetary award in order to avoid an unreasonable result." Aster v. Gross, 7 Va. App. 1, 6, 371 S.E.2d 833, 836 (1988) (footnote omitted). The trial judge expressly found that "[t]he grounds for divorce and the reasons for the breakup had little or no effect on the assets of the parties," and the record supports this holding. According to the testimony of the parties, the wife left the marital home after she became increasingly unhappy with the lack of communication and intimacy in her relationship with the husband. Although her reasons for leaving the marriage constituted "fault" under Code § 20-91(6), they did not affect the assets of the parties.
With the exception of the wife's tax debt and the credit to the husband for the equity he has added to the value of the marital home from separate funds, the trial judge determined that the marital assets should be divided equally. Although we have remanded the issue of credit to the husband for increasing equity in the marital residence due to his mortgage payments from separate funds since the date of the equitable distribution award, we do not find that the trial judge erred in his general equitable distribution scheme. "Unless it appears from the record that the trial judge has not considered or has misapplied one of the statutory mandates, this Court will not reverse on appeal." Ellington v. Ellington, 8 Va. App. 48, 56, 378 S.E.2d 626, 630 (1989).
For these reasons we affirm the decree in major part, reverse the decree in one part, and remand for a modification consistent with this opinion.
Affirmed in part, reversed in part and remanded.