Opinion
Record No. 1330-92-4
August 10, 1993
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY H. SELWYN SMITH, JUDGE.
Judith M. Bragan (Robert L. Bixby, on briefs), for appellant.
(John E. Kilcarr, on brief), for appellee.
Pursuant to Code § 17-116.010 this opinion is not designated for publication.
Deborah J. Mullins appeals an equitable distribution award entered following a remand from this Court holding that the trial court had misclassified the Blooms Road property as the husband's separate property. Whitla v. Whitla, Record No. 0625-90-4 (April 23, 1991). Mullins contends that (1) the trial judge erred, on remand, by admitting new evidence on the value of the Blooms Road property, when the value had been conclusively established at the first equitable distribution hearing and had not been challenged on appeal, and (2) the trial judge erred by refusing to allocate the parties' debt on the Elaine Avenue property. We hold that the trial judge erred by admitting new evidence on the value of the Blooms Road property, when the valuation date remained the same, and erred by refusing to allocate the debt on the Elaine Avenue property. Accordingly, we reverse the trial judge's rulings and remand for a determination of those issues.
Because the parties are familiar with the pertinent facts, we will not repeat them.
I. BLOOMS ROAD PROPERTY
The trial judge erred by admitting new evidence at the remand hearing of the value of the Blooms Road property after the value of the property had been established at the first evidentiary hearing and had not been challenged on appeal.
At the first equitable distribution hearing, the husband introduced evidence from an appraiser that the value of the Blooms Road property was $79,000 on the date of marriage and $164,000 on the date of separation. The wife did not challenge the appraisals. At the remand hearing, the husband introduced evidence, over the wife's objection, that the Blooms Road property was worth $97,000 at the time of marriage and $142,000 at the time of separation, which the judge accepted. The judge credited the husband $97,000 for the value of the property at the beginning of the marriage and awarded him sixty-six percent of the $45,000 appreciation in value as his share of the marital property. The appreciation in value during the marriage, based on the evidence presented at the first hearing, was $85,000.
The value of property established as of a date certain at an equitable distribution hearing may not be relitigated on remand unless the validity of such values had been challenged on appeal. See Kaufmann v. Kaufmann, 12 Va. App. 1200, 1208, 409 S.E.2d 1, 5-6 (1991); see also Anderson v. Anderson, 9 Va. App. 446, 448, 389 S.E.2d 175, 176 (1990). When the wife appealed the equitable distribution award in regard to the Blooms Road property, the only issue appealed was the classification of the property as marital or separate. Neither party contested the value of the property as of the date of the marriage or the date that the parties separated. The value of the property as of those dates is, therefore, res judicata, and that issue could not be relitigated on remand. Kaufmann, 12 Va. App. at 1209, 409 S.E.2d at 6. Consequently, it was error for the trial judge to reject the established values from the first evidentiary hearing and to admit additional evidence of value as the basis for making an equitable distribution award. Compare Wagner v. Wagner, ___ Va. App. ___, ___, ___ S.E.2d ___, ___ (1993) (en banc) (holding that where value has not been finally adjudicated or that issue is reversed on appeal, on remand the value must be determined as of the date of the evidentiary hearing).
The husband incorrectly contends that because the trial judge misclassified the Blooms Road property in the first evidentiary hearing, he could not have made a factual finding on its value as marital property. Code § 20-107.3 requires the trial judge, after either party has requested equitable distribution, to determine the value of "all property," both marital and separate. The husband introduced evidence on the value of the Blooms Road property. That evidence became part of the record as an uncontradicted, uncontested valuation of the property. Only the issue of classification was in dispute. The husband cannot now claim that no finding of fact with respect to the value of that property was made at the first equitable distribution hearing.
We hold, therefore, that the trial judge erred by admitting additional evidence on remand on the value of the Blooms Road property. Accordingly, we reverse the equitable distribution award as to that property and remand it for redetermination of the award based on the value of the Blooms Road property as previously determined.
II. ELAINE AVENUE PROPERTY
The trial judge had classified the Elaine Avenue property as marital, found that the property was valued at $109,000, and allocated the value as follows:
Wife Husband $18,050 (1/2 of equity) $18,050 (1/2 of equity) 15,000 (contribution 57,900 (contribution _____ to property) _____ to property) $33,050 TOTAL $75,950 TOTAL
The Elaine Avenue property was encumbered by a $40,000 mortgage. The trial judge did not specify how the parties were to allocate the mortgage, but instead directed them "to work out the matter of the loan on the property themselves."
On remand, the wife filed a motion requesting the trial judge to construe his prior ruling regarding the allocation of the debt on the Elaine Avenue property. The husband filed a motion requesting the court to exercise its authority under Code § 20-107.3(C) (i) to order the transfer of the Elaine Avenue property or any interest therein to one of the parties. Both requests resulted from the parties' inability to agree on a method for allocating the $40,000 mortgage in a buy-out as the court had directed in its original decree. The trial judge erred by refusing, on remand, to resolve how the $40,000 mortgage on the Elaine Avenue property should be apportioned.
The parties have been unable to negotiate a sales price for a buy-out of the Elaine Avenue property because the question of whether the mortgage is part of the husband's $57,900 credit for out-of-pocket expenses remains a disputed and unresolved issue. The wife contends that the husband's actual expenses for the property, for which he is entitled to reimbursement or a credit, consist only of $17,900 and that the $57,900, which the court credited to the husband, included $40,000 that he received from the mortgage loan. In other words, she contends that while he was granted a $57,900 credit, the credit took into account the fact that he had received $40,000 from the loan and was obligated to repay it in full. Based upon this proposition, the wife offered to buy out the husband's share of the property by assuming the entire mortgage and paying a purchase price of $35,950, which represented the value of the husband's interest in the property as calculated by the court ($75,950), discounted by $40,000 that the husband received from the mortgage loan which she would repay.
Although the husband's Exhibit #13 supports the wife's contention, he claims that the $57,900 credit includes only his one-half of the mortgage loan, or $20,000. Therefore, the husband proposed that the wife buy out his interest by assuming the entire mortgage and paying a purchase price of $55,950. The wife argues that under the husband's theory, he would be receiving the entire $40,000 and an additional $20,000 if she assumes the mortgage, thereby, in effect, paying her one-half of the mortgage loan twice.
The question of whether the $40,000 mortgage loan is included in the husband's credit is a factual question that must be resolved by the trial judge. Until that issue is decided, the parties cannot determine the wife's purchase price for the property without resolution of this factual dispute. Despite requests by the parties, two hearings have been held in the trial court without resolution of this issue. The trial court abused its discretion by refusing to resolve this factual question. See Shaugnessy v. Shaugnessy, 1 Va. App. 136, 140, 336 S.E.2d 166, 168 (1985). Accordingly, we remand the matter to the trial court for a finding of whether and the extent to which the amount of the mortgage on the Elaine Avenue property is included in the husband's $57,900 credit for out-of-pocket expenses.
Reversed and remanded.