Opinion
Record No. CL06-432.
Delivered: June 12, 2007.
Appeal from Roanoke County Circuit Court — CL06-432.
Charles B. Phillips, Esq., Phillips Phillips, Salem, Virginia.
William C. Maxwell, Esq., Salem, Virginia.
Dear Counsel:
Husband and Wife separated after a sixteen-year marriage. Some violence occurred at and around the time of the separation. Shortly thereafter, Husband moved in with a female family friend. Wife works in food service at Catawba Hospital. Husband stopped doing masonry work because of physical problems, began raising cattle with a partner and ultimately went back to masonry work. The parties have no children. Their assets include their marital home which Wife claims is hybrid property, a separate lot, some cattle, farm equipment, savings bonds, Husband's guns, their vehicles and Wife's retirement fund. Their furniture and household goods have been divided to the satisfaction of the parties. They ask for a divorce, equitable distribution of marital property and Wife is asking for spousal support.
Insofar as the hybrid nature of the marital home is concerned, Wife and First Husband owned real property worth $90,000.00 and encumbered by a lien for $30,000.00, leaving $60,000.00 equity in the property. When they divorced, they entered into a settlement agreement to allow Wife to buy out First Husband. Wife did not have enough money to buy him out, so Wife's brother took out a loan for $60,000.00 to pay off the lien and buy out First Husband's equity of $30,000.00. The real property was deeded to Wife's brother, and Wife did not receive any compensation for her $30,000.00 equity. Wife later married Second Husband, who is her current husband, herein referred to as Husband. They borrowed $60,000.00 to purchase the property, which was their marital home, back from Wife's brother. Wife argues that her original equity of $30,000.00 is her separate property. Husband argues that the real estate is entirely marital, was purchased by them as tenants by the entirety and that the parol evidence rule bars Wife from going beyond the four corners of the deed to bring into evidence a prior agreement between her and her brother regarding the property. In addition, Husband testified that he was never aware of Wife's claim to a $30,000.00 separate interest in the real estate until she told him after the parties separated. His testimony was that he thought both he and Wife were each receiving a one-half undivided interest in the land when they purchased it sixteen years ago.
The testimony in this case was spread over two separate hearings. Throughout those days the Court had the opportunity to observe the parties and the witnesses, determine their credibility and determine the weight to be given to their testimony and to the exhibits presented by the parties. Testimony was heard on all of the elements listed in §§ 20-107.1 and 20-107.3, Code of Virginia (1950), as amended, and the Court considered each of those factors in reaching its decision. Some of those are mentioned herein. The written and oral arguments of counsel helped a great deal, especially regarding classification of the marital residence.
DIVORCE
Although the parties had argued at various times throughout their marriage, sometimes violently, Wife was not aware that Husband was considering ending the marriage. Husband was suffering from depression related to the death of his father and ultimately his mother, and Wife felt he should get over his sadness more rapidly. When Wife returned from a vacation she and Husband argued. Wife became violent and damaged some furniture after Husband told her he did not want to be married any longer. Wife claims she did not tell Husband to leave the marital residence. Husband claims that she did and that was part of his rational for leaving. Thereafter Husband moved in with a female family friend and both she and Husband refused to answer the questions concerning whether they were having sexual relations with each other, on the grounds that their answers might incriminate them. The Court grants the parties a final decree of divorce a vinculo matrimonii, on the no-fault grounds of a twelve month uninterrupted separation pursuant to § 20-91(A)(9)(a), Code of Virginia (1950), as amended.
OWNERSHIP OF MARITAL HOME
The parol evidence rule states that oral testimony is not admissible to vary, contradict, or explain the terms of a complete and unambiguous writing. One of the exceptions to the rule is that parol evidence is admissible to show that a writing does not embody the parties' entire agreement and to establish the terms of that complete agreement. Shevel's, Inc. Chesterfield v. Southeastern Associates, Inc., 228 Va. 175, 182-183 (1984). Parol evidence is also admissible to establish a collateral oral contract. Id. At 183. Wife has argued that the deed from her brother to her and to Second Husband did not embody the entire agreement relating to the property, and that she and her brother had a collateral oral agreement with respect to the property. The parol evidence rule does not bar Wife from introducing evidence that is extrinsic to the deed in order to prove the existence and terms of the complete agreement, of which she claims the deed is but a part.
The Wife's position is that a trust implied by law, for her benefit, came into being through her dealings with her brother. It was not a constructive trust as argued, because such a trust comes into being " . . . independently of the parties intention, [in order] to prevent fraud or injustice." Gifford v. Dennis, 230 Va. 193, 198 (1985). Instead, if a trust was created it was a resulting trust because "[a] resulting trust may arise when one person pays for property, or assumes payment therefore, but has title conveyed to another with no mention of a trust in the deed." Id. At 198. However, Husband's uncontradicted testimony that he did not know of the existence of any separate interest in the real estate owned by Wife when they bought the property from the Wife's brother makes him a bona fide purchaser for value without notice. "It is a universal principle of equity that a bona fide purchaser for value from the trustee (in a resulting trust) takes the legal title free of a resulting or other trust of which he has no notice." Ransome v. Watson's Administrator, 145 Va. 669, 675 (1926). Using Wife's theory of the case, her brother would have been the trustee of the resulting trust for the benefit of Wife, and Husband had no notice of that implied trust. Accordingly, the resulting trust did not encumber the real estate when it was conveyed from Wife's brother to the parties.
Notwithstanding all of the above, Wife's failure to tell Husband of her claim to a separate interest in the real estate at the time of purchase and for the sixteen years thereafter amounts to fraud. Under Wife's theory of the case she tricked Husband into joining with her to buy just 2/3 of the land when he thought they were purchasing all of it. She is therefore estopped, under the theory of estoppel in pais, from claiming a separate interest in the real estate, both at law and through equitable distribution. See Chesapeake Ohio Railway Co. v. Walker, 100 Va. 69, 91 (1902). The entire parcel of real estate is marital property and is legally owned by Husband and Wife as tenants by the entirety.
VALUE OF MARITAL REAL ESTATE
Wife's expert appraiser testified that the marital home was worth $164,000.00. Husband's expert appraiser testified that it was worth $190,000.00. Both experts were extensively cross-examined. The difference in their approach was that Wife's appraiser compared only split-level homes and went into different areas and neighboring jurisdictions to get his comparables. Both appraisers used different guidelines in determining how much of the lower level would be treated as living space. Husband's appraiser used comparables that were all located in Roanoke County and that had similar amenities, but were not all split-level houses. The Court gave greater weight to the testimony and theories of appraisal used by the Husband's appraiser. Accordingly, the marital home is valued at $190,000.00.
The current deed of trust note on the marital residence is owed to GMAC Mortgage. The debt was in the amount of $76,913.11 on February 1, 2007. It is a marital debt.
The parties agree that the separate lot they own is marital property and valued at $30,000.00.
AGREED MARITAL PROPERTY
The parties have agreed that the bailer, hay rake and tractor are marital farm equipment with agreed values. Husband sold the bailer for $1,200.00. The tractor is valued at $18,000.00 and has a lien in the amount of $8,737.00 and an equity value of $9,263.00. The hay rake is valued at $400.00. They also agree that the appraised value of Husband's gun collection is $6,575.00 but that $950.00 of it is Husband's separate property and $5,625.00 is marital. The U.S. savings bonds are marital and valued at $3,618.00. None of their vehicles have liens. They are all marital and the 1995 GMC pickup is valued at $5,020.00, the 1993 Cavalier is valued at $1,075.00 and the 1998 Blazer is valued at $4,420.00. Wife's retirement account is valued at $13,053.49 as of the date of separation. The household furnishings have been divided to the satisfaction of the parties and will not be valued.
CATTLE
Husband owns some cattle in Craig County that he had before marriage and that his brother feeds for him. A large portion of the profit from them went to Husband's mother when she was alive. The parties did not value these and agree that they are Husband's separate property.
Husband raised cattle in partnership with another person after he first stopped working as a mason. The Court accepts Husband's testimony that after the separation of the parties he spent $6,871.47 of his separate funds to maintain the cattle. Those expenditures are as set forth in Husband's Exhibit #F, and include feed, hay, salt and medicine, tractor and equipment payments and fuel. His share of the proceeds of the sale of the cattle grossed $24,525.00. After deducting the $6,871.47 after separation cost of raising those cattle, the net marital proceeds from the cattle sale is $17,653.53.
HOUSEHOLD FURNISHINGS
Notwithstanding some initial difficulties, the parties settled this issue to their satisfaction. Each shall keep all of the personal property in his or her possession as though it was an equal distribution. The values of those items of property shall not be included in the equitable distribution formula.
DISTRIBUTION OF THE MARITAL PROPERTY
This is a fairly long-term marriage. Both parties devoted the majority of their energies to the marriage and to the acquisition and maintenance of the marital property. The improvements to their marital residence were accomplished by marital money and efforts. Both parties are in reasonably good health considering their age and occupations. Husband has knee problems and is currently working as a mason. Wife works in the food service section of Catawba Hospital and has blood pressure and cholesterol problems. Wife indicates she suffers some depression from the break-up of the marriage and she takes medication for it. They have no children of this marriage.
The marital property as set forth and valued herein will be divided equally between the parties. Wife may purchase the Husband's interest in the marital home by paying him one-half of the equity within 90 days of the date of the final order. The equity will be determined by deducting the amount of the current deed of trust note from the value of the real estate. Husband's name must be removed from the deed of trust obligation when Wife purchases the land. Wife can use credits from her share of the marital property that is transferred to Husband as a portion of the purchase price of the marital residence. If Wife chooses not to purchase this property, then it shall be sold in the most commercially reasonable manner and the proceeds divided equally between the parties. Wife will retain, as a portion of her share of the marital property, her pension/retirement plan, all of the savings bonds, the two motor vehicles in her possession, the family dog and the tangible marital personal property in her possession. The Husband shall retain his vehicle, the gun collection, the farm equipment, the extra parcel of land and the tangible marital personal property in his possession.
Although Wife requested that each party should keep their own life insurance policy, no evidence was presented concerning these policies. Accordingly, the Court does not recognize them as being marital property. The parties did agree to split the cost of the court reporter. Each party will be required to pay the cost of their respective real estate appraiser.
Except for the debt on the marital residence, limited evidence was presented concerning other marital debt. There is a J.C. Penney's account and a Lowes account that Wife is paying. The J.C. Penney's account in the approximate amount of $150.00 is Wife's separate obligation, the majority of which was charged by her for clothing after separation. No decision is made regarding the Lowes charge account. Husband's name should be removed forthwith from those accounts so that future charges may not be made against his credit. Both parties shall take the necessary steps to cancel any other joint credit accounts and bank accounts if they have not already done so.
SPOUSAL SUPPORT
In determining the question of spousal support the Court has considered all of the statutory factors set forth in § 20-107.1, Code of Virginia (1950), as amended and the related code sections and case law. Some of those factors and issues have been mentioned in this opinion. Wife currently earns $22,935.00 annually from her full time employment at Catawba Hospital. Husband has recently restarted his masonry trade and earns $19.00 per hour. He does not always get 40 hours per week because of weather related factors. He has not yet worked a full year at this trade. His employer estimates that his annual income will be approximately $30,000.00 per year. The budgets submitted by both parties showing their cost of living seem reasonable and are in keeping with the style they had become accustomed to during marriage. The Court fixes Husband's spousal support obligation at $300.00 per month. If the parties do not agree otherwise, those payments from Husband to Wife shall be by payroll deduction.
ATTORNEY FEES
Husband shall pay $5,900.00 of Wife's attorney fees when the marital residence is sold.
Counsel for Wife should prepare an appropriate order incorporating this letter opinion by reference, and present the same for entry after first obtaining endorsement of counsel.