Opinion
Record No. 0122-94-4
Decided: January 24, 1995
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY, Lewis H. Griffith, Judge Designate
Robert J. Surovell (Surovell, Jackson, Colten Dugan, P.C., on brief), for appellant.
James W. Korman (Dannon G. Williams; Bean, Kinney Korman, P.C., on brief), for appellee.
Present: Judges Barrow, Koontz and Fitzpatrick
Pursuant to Code Sec. 17-116.010 this opinion is not designated for publication.
Frances Zitelli (wife) appeals a decision of the Circuit Court of Arlington County disposing of certain issues of equitable distribution arising out of her 1983 divorce from Courtney Zitelli (husband). Limiting our review to the order appealed, we reverse and remand to the trial court with instructions.
The parties are familiar with the facts of this case. Accordingly, we restate in our discussion only those facts necessary to explain our holding. A trial court speaks only through its orders. Clephas v. Clephas, 1 Va. App. 209, 211, 336 S.E.2d 897, 899 (1985). Accordingly, we review the actions of the court as expressed in the order appealed. In so doing, we affirm the December 13, 1993 order of the trial court in all respects except as to its adoption in paragraph 5 of husband's calculations concerning the value of the 23rd Street property.
The procedural history of this appeal bears some comment. The initial divorce action commenced in November, 1982. A final decree, reserving issues of equitable distribution and support, was entered the following February. Matters of equitable distribution were resolved by decree entered January 2, 1985. An appeal was then taken before the Court of Appeals. The matter was disposed of by the Court, a rehearing was sought and granted, and following the rehearing, the matter was remanded to the trial court with instructions. In the interim between appeal and remand, the original trial judge was elevated to service on this Court. Accordingly, the matter was referred to the docket of another judge who elected, upon wife's motion, to reopen the case to receive additional evidence. In December, 1989, the new trial judge issued an informal opinion letter increasing six-fold the prior award of equitable distribution to wife. The letter opinion was not memorialized in an order. For the next three-and-a-half years motions and counter-motions were exchanged by counsel, the matter remaining unresolved. In the interim, the new trial judge retired for health reasons and much of the court record was destroyed in a fire. By agreement, the parties sought the recusal of the other judges of the circuit and appointment of a judge designate to resolve the matter. The judge designate entered an order which increased wife's equitable distribution award by less than 50%. It is from this order that wife now decree, reserving issues of equitable distribution and support, was entered the following February. Matters of equitable distribution were resolved by decree entered January 2, 1985. An appeal was then taken before the Court of Appeals. The matter was disposed of by the Court, a rehearing was sought and granted, and following the rehearing, the matter was remanded to the trial court with instructions. In the interim between appeal and remand, the original trial judge was elevated to service on this Court. Accordingly, the matter was referred to the docket of another judge who elected, upon wife's motion, to reopen the case to receive additional evidence. In December, 1989, the new trial judge issued an informal opinion letter increasing six-fold the prior award of equitable distribution to wife. The letter opinion was not memorialized in an order. For the next three-and-a-half years motions and counter-motions were exchanged by counsel, the matter remaining unresolved. In the interim, the new trial judge retired for health reasons and much of the court record was destroyed in a fire. By agreement, the parties sought the recusal of the other judges of the circuit and appointment of a judge designate to resolve the matter. The judge designate entered an order which increased wife's equitable distribution award by less than 50%. It is from this order that wife now appeals.
Property acquired during the marriage is presumed to be marital property. See Lee v. Lee, 13 Va. App. 118, 121-22, 408 S.E.2d 769, 771 (1991). Where property is acquired during the marriage by commingling separate and marital assets, the separate property is transmuted to marital property. See, e.g., Lambert v. Lambert, 6 Va. App. 94, 101, 367 S.E.2d 184, 188 (1988). Accordingly, the trial court correctly found that the 23rd Street property was marital property, although acquired and improved in part from the proceeds of the sale of husband's separate property and in part from husband's marital earnings.
In assessing the marital equity in the home, however, the trial court erred in adopting husband's calculations which showed that equity to be equal only to the capital gain following the acquisition. Rather, the trial court should have considered the net proceeds from the sale as net marital equity in the property.
We must also address two subsidiary issues related to the determination of the net martial equity in this property. First, we reject husband's assertion, as reflected in the calculations presented to the trial court and urged to this Court on appeal, that he should be credited with the full purchase price of the 23rd Street property. As noted above, property, including income, acquired during the marriage is presumed to be marital property. The record reflects that the income used to partially finance the acquisition of the 23rd Street property was earned during the marriage and, thus, was marital property. See Amburn v. Amburn, 13 Va. App. 661, 664, 414 S.E.2d 847, 849 (1992). Thus, husband's contribution, while a factor to be considered in determining the amount of an award in equitable distribution, Code Sec. 20-107.3(E), does not entitle him to a "credit" reducing the marital equity of the property.
We also reject husband's assertion that he is entitled to a credit reducing the marital equity of the property for the potential tax which he may have to pay on the capital gain from the sale of the home. Although the trial court is directed by the statute to consider tax implications in making an award of equitable distribution, taxes which are merely potential and may never in fact be assessed are not contemplated by the statute. Here, the record does not reflect that husband will in fact be assessed capital gains taxes as a result of the sale of the property in question.
For these reasons, we reverse and remand so that the court may determine the net marital equity in the 23rd Street property at the time of its sale and make an appropriate award in equitable distribution to wife in accord with the law applicable to the case and consonant with the holding of this opinion. The parties shall not raise any other matter on remand.
Reversed and remanded.