Opinion
Record No. CL07-879.
December 21, 2010.
Sharon Chickering, Esq. Trial Lawyers, P.C. 301 1st Street, SW P.O. Box 2030 Roanoke, Virginia 24009-2030
Alton B. Prillaman, Esq. Osterhoudt, Prillaman, Natt, Helscher, Yost, Maxwell Ferguson, P.C. P.O. Box 20487 Roanoke, Virginia 24018
Dear Counsel:
Husband and Wife were married for approximately eighteen years at the time of their separation in September 2008. This is the second divorce proceeding they started. Their previous separation resulted in reconciliation. In this suit Wife alleged Husband was guilty of adultery, or in the alternative, cruelty and constructive desertion. Husband filed a pro se response and denied the allegations of fault. He ultimately hired an attorney to represent him in this case. A motion for a no-fault divorce based on the parties living separate and apart for a period of more than twelve months was filed. Wife presented evidence and later updated that evidence by depositions as proof of that ground for divorce. The Court granted a no-fault divorce at a hearing on April 12, 2010. Since then, neither side has presented a divorce decree for the Court to enter ordering the divorce.
MARITAL HISTORY
After graduating from high school, Wife who is now 51, earned her dental assistant degree from Virginia Western Community College and has recently been taking computer classes. This computer training and her dental assistant degree helped her most recently when she worked for Delta Dental Insurance Company. For the majority of their marriage Wife worked as a chair side dental assistant for various dentists in the Roanoke Valley. She has always been employable. She recently turned down employment as a dental assistant with two different dentists. Her rate of pay would have been $16.00 per hour for a 40 hour week. She did not take either of the job offers as she plans to move out of Virginia immediately after the divorce is finalized. Her physical and mental health is good, although she takes prescription medication for her nerves and she has had a hysterectomy and carpel tunnel surgery. Wife is able to continue her employment whenever she desires.
Husband works for Blue Ridge Color Company selling auto body shop equipment and supplies. His territory includes parts of Virginia and West Virginia and requires him to be on the road and away from home most weekdays. His income has gradually increased during the parties' marriage and he now earns $66,435.46 per year. He also refurbishes and sells classic cars, and has done so his whole life. His physical and mental condition is good. He is 57 years old. He has a high school education and has taken some real estate classes. Husband anticipates continuing the same employment. He plans to remain in the Roanoke Valley.
The parties have no children. They devote a lot of time and affection to their dog Gracie. Husband owned a home prior to marriage that Husband and Wife lived in during the early part of their marriage. Husband paid the taxes and insurance on that residence. It was ultimately sold and a new marital residence was purchased in the joint names of Husband and Wife. Funds from the sale of Husband's separately owned house, savings, and borrowed funds were used to purchase their current marital residence. Husband has resided in that residence since the separation of the parties. Each party maintained his or her own health insurance through their place of employment. Husband, who earned the greater income, devoted more money to the marriage than did Wife. Wife was a homemaker and kept the house, purchased household items from her income and paid the phone bill. She did the marketing, paid for and prepared their meals. Entertainment was frequently out door grilling with friends. Husband maintained the outside of the house and yard. Each party appeared to devote their entire energy to their marriage and the well being of their family.
Although fault grounds were alleged, the parties simply drifted apart and a no-fault divorce was granted. Neither party tried to hide assets or spend them in contemplation of divorce. Except for Husband's expenditure of some marital property and funds while building a barn on the Montgomery County farmland, most of the debts incurred by the parties were intended for marital purposes. Both parties pay taxes on their earnings and Husband has paid the house payment, insurance and taxes on the former joint marital residence since their separation. The parties continue to separately maintain the same standard of living they did during their marriage.
EQUITABLE DISTRIBUTION
When making equitable distribution decisions in this case the Court weighed the testimony and demeanor of the parties, their various experts and witnesses, as well as the numerous exhibits presented in evidence. The Court also applied all of the dictates of § 20-107.3, Code of Virginia (1950), as amended, and all of the factors listed in subsection E of § 20-107.3, with special emphasis on those factors specifically mentioned in this letter opinion. In addition, in reaching its decision the Court considered the equities of the parties and the oral and written arguments of their lawyers.
The parties have entered into stipulations concerning the classification and value of the majority of their property. They have not agreed as to the classification and value of a parcel of farmland, a dog and a corvette automobile. They also have not agreed as to a division of any of their assets and ask that the Court determine what percent of the assets go to each party based on the factors contained in § 20-107.3 (E).
AGREEMENTS AND STIPULATIONS
Joint Exhibit #1, dated 6/8/10, contains the formula the parties used to determine that the value of the marital share of their home as of 4/12/10 was $93,015.00. Husband contends that he should get a greater share than Wife because he made all of the payments on the residence since the separation of the parties in August 2008.
Joint Exhibit #2, dated 8/10/10, restates that the value of the marital share of their home is $93,015, pursuant to the formula set forth in Joint Exhibit #1. It lists eight marital vehicles that are not valued but are to be sold and the proceeds divided in accordance with the Court's direction. Finally, it lists intangible assets valued at $187,216.89. Those figures had to be adjusted because of math errors and the actual total of the marital share of intangible assets is $187,395.90. Those assets include stock accounts, bank accounts retirement plans and IRA's. In addition, the parties have orally agreed that the 1996 Nissan automobile driven by Wife and titled in her name is marital property valued at $2,475.00, and that her engagement ring is her separate property. They have also divided their furniture and household furnishings to their satisfaction.
One of the strange things about this case is that the individual lawyers appeared to be arguing different facts. Husband was convinced that various agreements had been reached and argued what he thought were stipulated facts. Wife denied the existence of these agreements and argued facts favorable to her client's position. That is the reason that some of the Court's opinions differ from the position taken by either party.
CORVETTE
Wife identifies the Corvette as red and Husband says it is orange. He testified that he purchased it before marriage, but Wife says it was purchased after marriage.
Husband produced a 1985 title to a 1973 Chevrolet in the name of a person from whom Husband claims he bought the vehicle. He says that is the title to the vehicle in question. The title has a notation on its face of a lien that was released in 1988, ostensibly for the benefit of the prior owner. A DMV transcript says that the vehicle is black. Husband testified that the prior owner does not recall when he sold the vehicle. Husband stated that it could not be licensed as it had no exhaust system and it suffers from other major infirmities. No other evidence was presented concerning the date of its purchase, the source of funds used to purchase it or its current value. Husband has not proven it to be separate property and Wife has not proven it to be marital property. Lacking sufficient evidence, the Court makes no equitable distribution decision of any sort regarding that vehicle.
DOG
A great deal of evidence was presented concerning Gracie the dog. Two veterinarians testified as to the animal's health and to the care given to it by each of the parties. Wife's mother, who cares for the dog when Wife is at work, testified as to the dog's actions when going to and returning from visitations with Husband. She also testified as to the dog's behavior around Wife. Both Husband and Wife testified about their interaction with the dog. Husband purchased the dog during marriage. No testimony was given as to the purchase price of the dog, the source of funds used for the purchase or its current value. Wife claims the dog was a gift to her from Husband and that she was its primary caretaker. Husband testified that he also cared for the animal and that it was a family pet owned by both of them. At the request of the parties the Court placed custody of the dog with Wife and fixed a visitation schedule. Sufficient evidence was not presented for the Court to value the animal. It is owned jointly by the parties and cannot be divided. If either party wants to purchase the other's interest in the dog they can do so by a bidding process arranged by their lawyers. If the lawyers cannot work that out, a hearing should be scheduled and the parties may bid in the courtroom. The Court will grant ownership of the dog to the highest bidder. The prior orders requested by the parties concerning custody of and visitation with the dog will remain in effect pending its sale. Whatever funds are paid for the dog will be divided equally between Husband and Wife.
MARITAL RESIDENCE
Husband and Wife are in agreement that the value of the marital share of their home is $93,015.00 and that the remaining equity in the house is Husband's separate property. They do not agree as to how the marital share of that asset should be apportioned. Husband claims that he should get a greater share because he has paid all of the house payments since the separation of the parties in September 2008, a twenty-seven month period, and that he paid the down payment and made the majority of the house payments prior to their separation. Both parties agree that Wife has not contributed to the monthly house payment since the parties separated. Both parties also agree that Husband has had the exclusive use of the premises for the past twenty-seven months.
Husband's argument concerning the receipt of credit for the house payments he made since separation is similar to the argument made in Raiello v. Raiello, 2001 Va. App. LEXIS 416 (2001). In that case the husband claimed credit for the post-separation mortgage payments he paid with his post-separation earnings. Citing generally Von Rabb v. Von Rabb, 26 Va. App. 239 (1997), the Court of Appeals held that husband was not entitled to credit for the post-separation note payments but he was entitled to credit for the equity increase in the home caused by his post-separation mortgage payments. Since there was no evidence in our case as to the equity increase in the marital home after the separation of the parties, the Court tried to cobble together that information on an amortization schedule using the limited information presented at trial. That proved to be impossible as each succeeding payment increased the amount of principle payment and decreased the interest payment. It was necessary to determine the exact term of the note and the specific note payment that was being made in order to accurately calculate the equity payment. That could not be done with the limited information at hand. Accordingly, no credit is given Husband for his post separation house payments.
There were no unusual factors in this case that would warrant a disproportionate division of the marital share of the residence. Each party appeared to contribute their greater efforts and talents in maintaining the upkeep of their home and their marriage.
The stipulated marital share value of $93,015.00 will be divided equally between the parties.
Husband may purchase Wife's interest in the marital residence by paying her one-half of the stipulated marital share and by either refinancing the residence in his own name or obtaining a release of her obligation on the mortgage. He will have 45 days to accomplish this. If he does not wish to purchase the residence, it will be placed on the market and sold. In the event that the home is sold, Wife's share of the proceeds over equity will be in the same proportion as her interest in the marital equity stipulated to in Joint Exhibit #1. The total equity in the marital home is $225,821, and the Wife's share of that equity is one half the marital interest of $93,015 or $46,507.50. The Court finds, by dividing the aforementioned figures ($46,507.50/$225,821) and rounding to the nearest percent, Wife's interest in sales equity is 21%.
FARMLAND
Husband's Aunt planned to make him a gift of 12.5 acres of family farmland in Montgomery County in 1998. Husband insisted on giving his Aunt something in return for the land so she asked for one of his Corvettes. Instead of giving her the car, he gave her a check for $7,800.00 so that she could buy a particular used Corvette herself. Although no appraisal was made of that land as of 1998, and no agreement was entered into as to its 1998 value, Husband presented a copy of the 1998 tax assessment on the property in the amount of $24,300.00. The land was conveyed and titled solely in Husband's name. This conveyance occurred during the parties' marriage. Thereafter, Husband constructed a barn on the land. This construction was completed prior to the separation of Husband and Wife. Each of the parties independently commissioned a land appraisal. Wife's expert testified that the land was worth $105,000.00, of which $10,000.00 was attributed to the barn. Husband's appraiser agreed that the barn increased the value of the land by $10,000.00, but he fixed the land and barn value at a total of $95,000.00.
After considering the testimony of the appraisers, examining the comparable properties used by each of them in making their respective appraisals, and after looking at the adjustments made by them to the value of their comparables, the Court finds that the Montgomery County farmland is valued at $105,000.00. The Court further finds that the $7,800.00 check given by Husband to his Aunt to buy a Corvette was consideration for a portion of the real estate. The $7,800.00 came from the sale of a Mercedes automobile that Husband had owned prior to marriage and was his separate property. Those proceeds from the sale of the Mercedes together with money earned during marriage by Husband had been commingled in Husband's separate checking account and resulted in the loss of identity of the contributed funds. This separate checking account was Husband's prior to marriage and was never closed. Wife was not a signatory on that account. The separate funds continued as separate property and the marital funds were transmuted to separate property as a result of the deposit into Husband's separate account. See § 20-107.3 (3) (d) and Duva v. Duva, 55 Va. App. 286, 293-294 (2009). No tracing occurred to show otherwise.
Accordingly, whether the source of funds was from the proceeds of Husband's separately owned Mercedes, or from marital funds deposited into the Husband's separate account and transmuted to Husband's separate property, that money is classified as Husband's separate property. Since no tracing occurred that would identify the money as marital, the Court finds that the acquisition of the real estate by Husband was partially by purchase with Husband's separate funds and partially by gift. Therefore, the farmland was initially acquired as Husband's separate property.
From whatever its original value may have been upon acquisition, the farmland's subsequent increase in value resulted from passive appreciation, except for the increase in its value caused by the construction of the barn. Husband's actions in building that structure enhanced the value of the Montgomery County farmland by $10,000.00. That increase in value is marital because Husband used marital funds to purchase the building materials and he used marital effort to construct it.
The $10,000.00 marital share of the farmland will be divided equally between the parties. The argument made by Husband for a different division of the farmland presupposed the existence of an agreement between the parties, which Wife vehemently denied. The Court cannot create an agreement where none existed. Accordingly, Husband's argument is rejected. Wife's evidence was not sufficient to prove that the funds used to purchase the farmland were marital.
INTANGIBLE ASSETS
The parties previously agreed as to the value of their intangible marital assets. Even though they now disagree, their original agreement was recorded in writing by the Court on Wife's Exhibit A (3). The intangibles include an Andrew Garrett account, the Member One IRA's, none of the BBT accounts, some of the Wells Fargo funds and all of the Bank of America funds. Of all of those intangibles, $152,182.83 is held in Husband's name and $2,006.38 is held in Wife's name. They total $154,189.21. These figures are 99 cents off one of the stipulations of value, but the Court traced it to transposed numbers. The figures used by the Court are correct. By agreement, all of that money is marital property. Those funds will be divided equally between the parties.
RETIREMENT ACCOUNTS
The parties entered Joint Exhibit #2 into evidence on August 10, 2010 stipulating that at the date of separation the value of the marital share of Husband's Goldman Sachs retirement account was $23,702.79 and the value of the marital share of Wife's Fidelity Investment account was $9,503.90. Both parties argued different numbers in their written arguments. Wife argues that no evidence was presented as to the value of the retirement accounts at separation. That is wrong. The parties agreed on the value of these accounts at the date of separation as set forth above. Husband argues different numbers than the parties originally stipulated but presents no evidence as to the nature of the change. Therefore, Husband's argument is not accepted. Neither party presented evidence as to whether the appreciation of the accounts was passive or active, therefore the Court accepts the original figures presented above from the agreed Joint Exhibit #2. No unusual factors exist that would merit an unequal division of these accounts and as such they will be divided equally between the parties.
SPOUSAL SUPPORT
Including the bonus he makes, Husband earns or has the ability to earn $66,435.46 per year. That works out to $5,536.29 per month. Wife has the ability to earn $16.00 per hour as a dental assistant for 40 hours per week but currently chooses not to work. She is voluntarily unemployed and the Court attributes income to her at the rate of $16.00 per hour times 40 hours per week times 4.3 weeks in a month, for a total of $2,752.00 per month or $33,024.00 per year. Wife has estimated what she believes her expenses will be when she moves to another state. Husband's expenses are based on his current living costs. Considering the factors set forth in § 20-107.1 (E), Code of Virginia (1950), as amended, and especially those factors specifically mentioned in this letter opinion, the evidence in this case concerning the needs of the parties and their ability to pay support, their cost of living and the standard to which they were accustomed to during marriage, the Court sets Husband's obligation to pay spousal support to the Wife in the amount $850.00 per month, pro-rated as of the date of this letter opinion.
ATTORNEY FEES
The Court fixes attorney fees to by paid by Husband to Wife in the amount of $4,800.00. That money should be paid within 45 days of the entry of the final divorce decree or upon the transfer of the marital residence, whichever first occurs.
Counsel for Wife should prepare an appropriate final order and present it for entry after first obtaining endorsement of counsel.